Hapag-Lloyd shareholder rejects approach for merger from CMA CGM

Klaus Michael Kuehne, one of Hapag-Lloyd’s largest shareholders, confirmed an approach by CMA CGM for merger talks at the company’s annual general meeting.

However, Kuehne rejected the advance, stating that Hapag-Lloyd would rather acquire CMA CGM.

In either case, a merger between the two companies would create the largest container shipping line in the world.

Kuehne, who owns a 21.4% share in Hapag-Lloyd, told radio station NDR that CMA CGM “approached me and made several attempts to negotiate, but we found the proposal made no sense. We do not want it.”

Hapag-Lloyd was one of the container shipping companies to release profit warnings earlier this year, due to low freight rates and rising costs. It also faces the International Maritime Organization’s upcoming 0.5% sulphur cap for marine fuel in 2020, for which it will either need to install scrubber (exhaust gas cleaning) systems on new and existing ships, so they can keep using cheaper high sulphur fuel; use more expensive low sulphur fuel oil; or use liquefied natural gas.

CEO Rolf Habben Jensen, speaking at the meeting, said Hapag-Lloyd needed to “secure a competitive cost structure” and become “even more efficient” to cope with a challenging market environment.

(Source: The Loadstar)