THE ACCC has given the nod to Hapag-Lloyd’s takeover, via the 100% acquisition of outstanding shares and voting rights, of ZIM Integrated Shipping Services.
The Commission was required to review the proposal under section 51ABZE(1) of the Competition and Consumer Act 2010 (Cth), due to what it described as “horizontal overlap in the supply of container liner shipping services between Asia and Australia”.
“The acquirer, HLAG, is an international container liner shipping company, offering global transport services for container cargo and has the fifth largest TEU [sic] in the world," it stated.
“The target, ZIM, is a public company listed on the New York Stock Exchange in the USA (NYSE: ZIM). Its headquarters are in Israel. Globally, ZIM is active in container line shipping and related services, including logistics services (such as freight forwarding).
“In Australia, ZIM operates a single container liner shipping service, which connects Australian east coast ports (Brisbane, Sydney and Melbourne) to ports in Asia (Busan, Qingdao, Shanghai, Ningbo, Yantian). ZIM also has a limited presence in the downstream freight forwarding services market in Australia. HLAG does not conduct these activities in Australia.”
Under a Phase 1 Determination the Commission has decided the acquisition can proceed, having considered information and documents that were submitted and publicly available information. There was no need for a Phase 2 investigation.
“The acquisition is unlikely to have the effect of substantially lessening competition in any market,” Commissioner Philip Williams determined.
“The parties’ are relatively small providers of container liner shipping services between Asia and Australia on most routes, and the merged firm would continue to face competition from alternative providers, including several larger container shipping lines."
Hapag’s agreed takeover of ZIM was first announced – as a merger – in mid-February in a USD 4.2 billion deal.
The complexity of the arrangement and loss of local control has drawn considerable criticism from within Israel and in May, shortly after ZIM shareholders voted to accept the takeover, a “superior counter-offer” was lodged by a group of unaffiliated Israeli investors. This does not seem to have progressed.