EUROPEAN COMMISSION
PRESS RELEASE
Brussels, 11 September 2014
Mergers: Commission approves merger between Hapag
Lloyd and CSAV in container liner shipping sector, subject to conditions
The European Commission has cleared under the EU Merger Regulation the proposed
merger between Hapag Lloyd, a German shipping company with worldwide activities, and
rival Compañia Sud Americana de Vapores S.A. ("CSAV") of Chile. The clearance is
conditional upon the withdrawal of CSAV from two consortia on the trade between
Northern Europe and the Caribbean and South America's West Coast, where the merged
entity would have faced insufficient competitive constraint to avoid a risk of price raises.
The commitments offered by the two companies address these concerns.
Commission Vice President in charge of competition policy Joaquín Almunia said: "Liner
shipping plays a central role in global trade, so competition in this sector is essential for
businesses and consumers in the EU. Through the commitments, our decision averts the
risk that the merger between Hapag Lloyd and CSAV could lead to any price increase."
The merger will create the fourth largest container liner shipping company worldwide,
after Maersk, MSC and CMA CGM. The activities of Hapag Lloyd and CSAV overlap in the
container liner shipping business and have limited vertical links. As many other carriers,
the two companies offer container liner shipping services mainly through cooperation
agreements with other shipping companies known as "consortia".
The Commission examined the effects of the merger on competition in the market for
container liner shipping services on twelve trade routes connecting Europe with the
Americas, Asia and the Middle East.
Consortia members decide on capacity setting, scheduling and the list of ports of call,
which are all important parameters of competition. The Commission found that the
merger, as initially notified, would have created new links between previously unconnected
consortia. The Commission had concerns that these new links would have resulted in anticompetitive effects on two trade routes: the route between Northern Europe and the
Caribbean, and the route between Northern Europe and South America's West Coast. On
these routes, the merged entity, through the consortia that the two companies belong to,
may have influenced capacity and therefore prices to the detriment of shippers and
consumers.
In order to address these concerns the companies offered to terminate the two consortia
in which CSAV currently participates on these two trade routes – i.e. the Euroandes
consortium and the Ecuador Express consortium, both with MSC. This will eliminate the
additional links between previously unrelated consortia that the merger would have
created on the two routes. In view of the remedies proposed, the Commission concluded
that the proposed transaction, as modified, would not raise competition concerns
anymore. This decision is conditional upon full compliance with the commitments.
IP/14/998
As regards the vertical links created by the transaction between the market for container
liner shipping services and the market for (i) container terminal services, (ii) inland
transportation services, (iii) freight forwarding services, and (iv) harbour towage services,
the Commission found no competition concerns because of the limited market share of the
parties in the upstream and downstream markets.
The transaction was notified to the Commission on 23 July 2014.
Companies and products
Hapag Lloyd is an international container liner shipping company. Through a joint venture
with a subsidiary of HGV, HL AG also offers port terminal services in HamburgAltenwerder. HL AG's main shareholders include HGV, Kühne Maritime, and TUI AG
("TUI"), a company active in the travel sector.
CSAV provides container liner shipping services and has limited activities in the freight
forwarding and inland transportation sector. CSAV is controlled by Quiñenco S.A. (Chile), a
Chilean company which provides, among others, terminal, steve-doring, towage and other
associated services through its subsidiary SM SAAM S.A.
On the route between Northern Europe and the Caribbean, Hapag Lloyd is currently a
member of the Eurosal consortium with HSDG and CMA CGM; CSAV is a member of the
Euroandes consortium with MSC.
On the route between Northern Europe and South America's West Coast, Hapag Lloyd is
currently a member of the Eurosal consortium with HSDG and CMA CGM; CSAV is a
member of the Euroandes consortium and the Ecuador Express consortium, both with
MSC.
Consortia are operational agreements between shipping companies for the provision of a
joint service. The members of a consortium jointly agree on the capacity that will be
offered by the service, on its schedule and ports of call. Generally, each party provides
vessels for operating the joint service and in exchange receives a number of container
slots across all vessels in the service, based on the total vessel capacity contributed. The
allocation of container slots is usually pre-determined and shipping companies are not
compensated if the slots attributed to them are not used. The costs for the operation of
the service are generally borne by the vessel providers individually, so that there is in
principle no cost sharing between the members of a consortium.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a
turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent
concentrations that would significantly impede effective competition in the EEA or any
substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared
after a routine review. From the moment a transaction is notified, the Commission
generally has a total of 25 working days to decide whether to grant approval (Phase I) or
to start an in-depth investigation (Phase II).
More information will be available on the competition website, in the Commission's public
case register under the case number M.7268.
2
Contacts :
Antoine Colombani (+32 2 297 45 13)
Marisa Gonzalez Iglesias (+32 2 295 19 25)
For the public: Europe Direct by phone 00 800 6 7 8 9 10 11 or by e-mail
3