Maersk Line, the world’s largest shipping company, will buy its smaller rival Hamburg Süd, which has a strong presence in Latin America, as part of its plans to strengthen its global operations.
The agreement, announced by the A.P. Moller-Maersk, is the group’s first total acquisition in more than a decade and highlights a consolidation drive in container shipping, which has faced low prices for freight and oversupply
Hamburg Süd, the seventh largest container shipping line in the world, has been an operator with a strong presence in Latin America since it was founded in 1871.
With the acquisition, Maersk Line will increase its container capacity and market share to 18.6%.
The decision is framed by Maersk’s new chief executive, Soren Skou, to focus on transportation and logistics and spin off the company’s energy operations. Maersk shares rose more than 5 percent.
“This will give us a very strong platform in Latin America,” said Skou, who noted that there will be “significant” cost-benefits from the combination of the two companies’ networks.
Skou declined to reveal the value of the deal, but said it would be a cash-only transaction and that Maersk does not need to sell other assets to proceed with the purchase.