The European Commission said it has given approval to a merger between UASC and Hapag-Lloyd major container liners, subject to conditions. The clearance is conditional on the withdrawal of UASC from a consortium on the trade routes between Northern Europe and North America, where the merged entity would have faced insufficient competitive constraint.
Commissioner Margrethe Vestager, in charge of competition policy, said:
“European companies rely on container liner shipping services for their transatlantic shipments. It’s very important that the markets remain open.The commitments offered by Hapag-Lloyd ensure that the takeover will not lead to price increases on the routes between Northern Europe and North America.”
The Commission found that the merger, as initially notified, would have created links on the Northern Europe – North America trade routes between the consortia and alliances in which Hapag-Lloyd is a member and the NEU1 (ex-Pendulum) consortium, in which UASC is a member.
As a result, through the consortia and alliances it would belong to, the merged entity could have influenced capacity and prices on a very large part of those markets, to the detriment of customers and, ultimately, consumers. The Commission had concerns that on those routes, the merged entity would have faced insufficient competitive constraint from rival companies.
The transaction also creates limited vertical links between the companies’ activities in container liner shipping services and the following services, where Hapag-Lloyd or its controlling shareholders are active: (i) container terminals, (ii) inland transportation, (iii) freight forwarding, and (iv) harbour towage. However, the Commission found no competition concerns in these areas, in particular because several other service providers are active in these markets.
In order to address the Commission’s competition concerns, Hapag-Lloyd offered to terminate the participation of UASC in the NEU1 consortium. This will entirely remove the additional link between Hapag-Lloyd’s and UASC’s consortia, that the transaction would have created on the Northern Europe – North America trade routes. As a result, the merged entity’s position on these trade routes will be comparable to that of Hapag-Lloyd today.
Although UASC will continue to operate as part of the NEU1 consortium during the notice period to guarantee an orderly exit, a monitoring trustee will ensure that no anti-competitive information is shared between the NEU1 consortium and the merged entity during that notice period.
The Commission therefore concluded that the proposed transaction, as modified by the remedies proposed, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.
Source: europa.eu
