Maersk eyes takeover of Korean lines, analyst says

Maersk Line, the largest container line in the world, may target Hanjin Shipping and Hyundai Merchant Marine, the nation’s two largest shippers, for acquisition, according to Jefferies International. However, industry insiders in Korea were doubtful of the chances for a merger.

Hanjin Shipping, once the world’s No. 7 shipper, filed for court receivership last month, while Hyundai Merchant Marine is under creditor-led turnaround management.

“Maersk, as the market leader, will definitely participate in the consolidation - they will have to,” David Kerstens, transport analyst for Jefferies International in London, was quoted by Bloomberg as saying. “[But] the takeover options for Maersk are fairly limited, as most container lines are already tied up in alliances or are family or government-controlled. The most likely scenario is that Maersk would take over the assets of Hyundai and Hanjin.”

As the Danish shipper hinted last week it will bank on acquisitions for future growth, speculation on its targets has been growing over the week.

“If Maersk Line needs to grow, it doesn’t make sense to order new ships as there are already too many ships in the market,” Maersk Chairman Michael Pram Rasmussen told Bloomberg on Friday at the shipbuilder’s headquarters in Copenhagen. “So if we want to grow, we need to do it through acquisitions so that we don’t’ flood the market with more ships.”

In Korea, industry insiders expressed doubt.

“What the nation learned the most through the recent fall of giant Hanjin Shipping was how important the logistics and shipping industry is to the nation,” said Hwang Jin-hoi, director of the maritime industry research department at the Korea Maritime Institute. “It will not be easy for creditors or Korea Development Bank to sell the shipping units to foreign buyers.”

According to Hwang, there is a tacit consensus in the country after the 1997 Asian financial crisis and the International Monetary Fund bailout, that once companies sell core assets during times of hardship, they cannot normalize management of the company even after good times arrive. “Also for HMM, there are government efforts [to save a national shipper].”

“There hasn’t been a practical offer for acquisition thus far from Maersk,” a spokesperson from Korea Development Bank said under condition of anonymity. “We have not yet considered or discussed on the issue.”

Global shippers, including Maersk, have been suffering from overcapacity and declining global trade volume, which has led many to consider mergers to increase size and operate more efficiently.

Meanwhile, Taiwanese ocean carrier Evergreen Marine has denied a news report published Sept. 20 in the Korea JoongAng Daily and the JoongAng Ilbo that Taiwan’s Yang Ming is considering an acquisition of Evergreen. The acquisition speculation is “patently untrue,” Evergreen said on Sept. 21.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]