MSC, Hamburg City Team Up to Jointly Operate Hamburger Hafen und Logistik -- Update

By Adria Calatayud

MSC Mediterranean Shipping Co. is teaming up with the city of Hamburg in a bid to take over Hamburger Hafen und Logistik's listed shares and operate the company jointly, the latest move by a European shipping giant to expand into port terminals and inland logistics.

Switzerland-based MSC said Wednesday that it is launching an offer for the free-floating A shares of Hamburger Hafen und Logistik--also known as HHLA--for 16.75 euros ($18.02) each, valuing all its class A shares at around 1.21 billion euros ($1.30 billion). MSC said HHLA would be operated as a joint venture, with the city of Hamburg holding a 50.1% stake and MSC taking a 49.9% interest.

HHLA's executive board will review and evaluate the offer in consultation with its supervisory board, the company said in response. HHLA operates three container terminals in Hamburg's port--one of the largest in Europe--as well as further container terminals in Ukraine, Estonia and Italy, and provides intermodal-transport and logistics services.

Shares in HHLA jumped on the news, rising 47% to EUR16.94 at 1258 GMT, above the offer price. MSC's bid represented a sharp premium to HHLA's closing share price on Tuesday of EUR11.54, after having traded in recent days near its all-time low, reached in March 2020, at the height of the Covid-19 pandemic.

HHLA has 72.5 million listed class A shares--of which the city of Hamburg currently owns 69%--and a further 2.7 million nonlisted shares owned by the city, according to the company's website.

German logistics magnate Klaus-Michael Kuehne, who owns a 30% stake in shipping company Hapag-Lloyd through Kuehne Holding, signaled interest in HHLA in remarks to German media earlier this week. His holding company didn't respond a request for comment.

The deal marks the latest step in the European shipping industry's push to become more vertically integrated logistics operators, a trend that was accelerated by supply-chain disruptions caused by the pandemic.

MSC said it has been investing heavily in building a portfolio of intermodal-transport services and in expanding its terminals business, which now operates 70 terminals across the world, mirroring moves by peers, Denmark's AP Moeller-Maersk and France's CMA CGM Group.

With the deal, MSC plans to substantially increase its container volume at the HHLA's terminals in Hamburg starting in 2025 with the goal of hitting at least 1 million twenty-foot equivalent unit annually from 2031 onward, it said. MSC and the city of Hamburg also agreed to commit to a long-term investment plan for HHLA, the company said.

The deal aims to make Hamburg a central hub for MSC's network of container services and logistics chains, the company said.

MSC's Hamburg-based rival Hapag-Lloyd, which owns a minority stake in one of HHLA's container terminals, is analyzing the news and its consequences, the company said Wednesday.

"We acknowledge the situation and expect that our relationship to HHLA will not be harmed," Hapag-Lloyd Chief Executive Rolf Habben Jansen said in an emailed statement.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

September 13, 2023 09:29 ET (13:29 GMT)

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