Hapag-Lloyd, based in Germany and the fifth-largest shipping company in the world, is currently considering participating in the acquisition bid for Hyundai Merchant Marine (HMM), the largest shipping company in South Korea, which is currently offering a sale, reports businesskorea.
Information Memorandum
According to investment banking (IB) industry sources on Aug. 17, Hapag-Lloyd has recently received an Information Memorandum (IM) from Samsung Securities, the lead manager for the sale of HMM, and is weighing the possibility of participating in the acquisition bid.
Hapag-Lloyd has chosen Goldman Sachs as its advisory firm and is considering the appropriate acquisition price and potential business synergies. If Hapag-Lloyd acquires HMM, it believes it can expand its presence in the Asian region within the container business and rise to be among the top three in the world.
The alliance
Hapag-Lloyd has been a member of the “The Alliance,” an alliance of shipping companies, since 2020 along with HMM. In particular, Hapag-Lloyd has recently been strengthening its presence on the routes between Asia and the Mediterranean, as well as the trans-Pacific routes between Asia and the eastern coast of the United States, by adding ships.
An official from the industry said, “Legally, there is no way to prevent foreign companies from investing in domestic companies. However, there are doubts regarding whether it would be reasonable for foreign companies to acquire a national flag carrier considering domestic sentiment.” Another official said, “We need to consider potential scenarios that could unfold. In times of war, domestic shipping companies have a role to fulfil. However, there are concerns that a company with adequate financial strength, as emphasised by the selling side, might be given priority in the acquisition process.”
The subject of this sale is the complete stake in HMM held by the Korea Development Bank (KDB) and the Korea Ocean Business Corporation (KOBC). KDB holds a 20.69 percent stake in HMM, while KOBC holds a 19.96 percent stake. In addition, both parties have included 1 trillion won (US$746.55 million) worth of HMM’s 2.7 trillion won scale of convertible bonds and bond with warrants in the sale. The estimated sale price in the industry, including a management premium, is around 4 trillion won. As a result, the total transaction size is estimated to reach 5 trillion won.
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Source : businesskorea
