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Acquisitions: The expansion’s way

The most of the biggest container shipping companies are not stopping to scan the industry for acquisition chances. This is not happening coincidentally. “Acquisitions” is one of the main strategies for the expansion and growth of the shipping carriers.

 

Acquisitions which have made an important impact on the market:

COSCO – OOCL

CMA CGM – APL

CMA CGM – ANL

Maersk Line – Hamburg Süd

Hapag-Lloyd – CP Ships

 

The above agreements have benefited the shipping giants which decided to buy smaller ones. Enhanced networks, expanded and faster services and new rotations are the main advantages.

 

Source: Alphaliner (As of July 14, 2017)

 

In the infographic, we can notice that OOCL’s acquisition by COSCO gave the necessary boost to Chinese mega carrier in order to overtake CMA CGM.

In the same manner, Maersk Line strengthened even more its leading position in the industry with the acquisition of Hamburg Süd.

 

Failed acquisition tries

Obviously, there are many acquisition tries which did not come to a happy ending. The recent CMA CGM merger approach to Hapag-Lloyd (?) could be a great example. However, it is not clear if the CMA CGM – HL acquisition proposal was true or just a rumor. German officials claimed that there was no contact with their French colleagues. In any case, the mega agreement was never made.

Another representative case is the Hapag-Lloyd – Hamburg Süd story. The world’s 5th stronger company was seeking for an acquisition agreement with its compatriot, in 2013. HL failed to acquire Hamburg Süd. Maersk would make the deal, 3 years later.

However, companies continue to search about possible acquisition deals, even after unsuccessful attempts. CMA CGM seems to be very active recently. ZIM and Evergreen sound to be its latest targets.

 

The conclusion is that acquisition actions seem to constitute one of the solutions for shipping carrier’s expansion. Buying another company, gives to acquirer the ability to expand its network, enhance its services and reduce the competition.

The result (in the positive scenario) is a stronger market’s position and finally increased earnings, which are the one and only aim, in most cases.

The acquisition strategy will continue to exist and play a key role in carriers’ business plans, as the offered benefits support companies’ development, expansion and growth.

Source: CN
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