The European Commission has cleared under the EU Merger Regulation the proposed acquisition of container liner shipping company Hamburg Süd (HSDG) of Germany by Maersk Line A/S of Denmark, subject to conditions.
The clearance is conditional upon the withdrawal of HSDG from five consortia on trade routes connecting (i) Northern Europe and Central America/Caribbean, (ii) Northern Europe and West Coast South America, (iii) Northern Europe and Middle East, (iv) the Mediterranean and West Coast South America and (v) the Mediterranean and East Coast South America. On these routes, the merged entity would have faced insufficient competition after the transaction.
Commissioner Margrethe Vestager, in charge of competition policy, said: “Competitive shipping services are essential for European companies and for the EU’s economy as a whole. The commitments offered by Maersk Line and HSDG will maintain a healthy level of competition to the benefit of the very many EU companies that depend on these container shipping services.”
The Commission examined the effects of the merger on competition in this specific market for container liner shipping on seventeen trade routes connecting Europe with the Americas, Asia, the Middle-East, Africa and Australia/New Zealand and found that the merger, as initially notified, would have created new links between the previously unconnected entities Maersk Line and five of the consortia HSDG.
According to the Commission’s analysis, this would have resulted in anti-competitive effects on the corresponding five trade routes (Northern Europe and Central America/Caribbean; Northern Europe and West Coast South America; Northern Europe and Middle East; Mediterranean and West Coast South America; Mediterranean and East Coast South America). In particular, these links could have enabled the merged entity to influence key parameters of competition, such as capacity, for a very large proportion of those markets, to the detriment of their commercial customers and, ultimately, of consumers.
The proposed transaction would also create:
- limited links between Maersk Line and HSDG in the markets for short-sea shipping and “tramp services” (unscheduled, on demand shipping), as well as,
- limited links between the two companies’ activities in container liner shipping and the container terminals, harbour towage, freight forwarding, container manufacturing and inland transportation sectors, where Maersk Line or other companies belonging to the Maersk Group are active.
However, in both areas, the Commission found no competition concerns, in particular because several other service providers are active in these markets.
The proposed commitments
In order to address the Commission’s competition concerns, Maersk offered to terminate the participation of HSDG in the five consortia (Eurosal 1/SAWC, Eurosal 2/SAWC, EPIC 2, CCWM/MEDANDES and MESA). This will entirely remove the problematic links between Maersk Line and HSDG’s consortia that would have been created by the transaction.
HSDG will continue to operate as part of the five consortia during the notice period to guarantee an orderly exit. However, a monitoring trustee will ensure that no anti-competitive information is shared between these five consortia and the merged entity during that notice period.
In view of the proposed remedies, the Commission concluded that the proposed transaction, as modified, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.
The transaction was notified to the Commission on 20 February 2017.
Source: EU Commission
