CSAV, Hapag-Lloyd to Become Fourth-Largest Container Line
Tim Rue/Bloomberg News
Cia. Sud Americana de Vapores SA shareholders approved a proposed combination of its container shipping operations with Germany’s Hapag-Lloyd AG to create the world’s fourth-largest container line.
Shareholders who own 84.5% of company stock voted in favor of the deal, by which CSAV will exchange its entire container shipping assets for a 30% stake in the Hamburg-based company. That percentage may increase to 34% via a $500 million capital increase in which CSAV has pledged $350 million, CEO Oscar Hasbun told shareholders at a meeting in Valparaiso, Chile.
Chile’s Luksic family bet on a recovery in the global shipping industry in 2011 when it began building a stake in CSAV. Luksic now owns 37%. The company is seeking the combination to counter a prolonged slump in the container shipping market and compete with larger-rival A.P. Moeller- Maersk A/S.
“Maersk is one of the few container shipping companies in the world that has profit, and it does that by economies of scale,” Hasbun said March 24. “We want to reach Maersk’s level of profitability and efficiency.”
The combined company will reap annual savings of about $300 million, expand its customer base and reach more trade routes, Hasbun said. CSAV expects to sign a binding agreement within the next 40 days and close the deal by the end of 2014.
Hapag-Lloyd will undertake an initial public offering of shares to raise $500 million between 12 and 18 months after the transaction is completed, Hasbun said.
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