GERMANY-BASED and fifth-largest shipping company in the world, Hapag-Lloyd is considering participating in Hyundai's takeover bid merchant marine (HMM), the largest shipping company in South Korea currently offering a sale.
As reported by South Korean media, the company recently received an information memorandum (IM) from Samsung Securities, the leading service provider for the sale of HMM, and is considering the possibility of participating in the bid, reports BusinessKorea.
If the German takes over HMM, it could expand its presence in the Asian region in the container business and become one of the three shipping companies worldwide.
Hapag-Lloyd has recently strengthened its presence on the routes between Asia and the Mediterranean Sea and the transpacific routes between Asia and the east coast of the USA by integrating ships. This gives them more influence on routes between Asia and Europe as well as America.
There is a lot of interest in the industry as to whether foreign companies can acquire HMM, which is virtually the only remaining South Korean national flag line in the country.
The analysis suggests that the fact that foreign companies have stronger financial standing compared to domestic mid-market companies like Harim, Dongwon and LX that joined the bid is a factor shaking the bid momentum.
An industry official said: "Legally, there is no way to prevent foreign companies from investing in domestic companies. However, there are doubts as to whether it would make sense for foreign companies to acquire a national airline, taking into account national ethos."
Another official commented: "We have to consider possible scenarios that could play out." In times of war, national shipping companies have an important role to play. However, there is concern that a company with sufficient financial strength, as the sellers point out, could have priority in the acquisition."
The subject of the sale is HMM's entire holding in HMM Korea Development Bank (KDB) and Korea Ocean Business Corporation (KOBC).
All eyes in the investment banking industry are on the preliminary results of the bid to acquire HMM, which closed yesterday.
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