THE MAJOR MAJORS BETWEEN ACQUISITIONS, MERGERS AND ALLIANCES IN THE VESSEL SECTOR:
Daniel Bosch Wood
Maritim Lawyer
LLM Southampton
Las Palmas de Gran Canaria
Attorney D. José Antonio Pejovés, provides details to differentiate these concepts
“How are shipping lines corporately moving in the maritime transport service industry in regular traffic?”, Is a question that the lawyer, arbitrator and professor of Maritime Law, José Antonio Pejovés, tries to solve, who maintains that “shipping lines in recent years have had a difficult time, due in part to the international financial crisis and its impact on maritime trade.
” In this scenario, he says, “it is not surprising that these corporate movements are always reviewed by the agencies that regulate free competition.”
Without wishing to be exhaustive, the lawyer explains that “three forms of what we call corporate movement in the sector can be identified: acquisitions, mergers and alliances.” And at this point it sets the problematic center of these corporate restructurings: “When we refer to acquisitions, mergers and alliances, we are dealing with complex business processes that have as their common denominator their resonance in the maritime market,” he says.
Acquisitions
“The acquisitions are basically the purchase of the shares of a shipping company on the other,” said Pejovés, who states that these may mean the total of the shareholding package or a part of the shares that allows the acquirer to control the company acquired.
In this way, he says, companies maintain their individuality by operating their brands in the market, and in any case are integrated into the same business group: “The most recent example has been the purchase of OOCL by the Chinese shipping company Cosco Shipping – which also acquired China Shippping, which will apparently culminate in a merger; as a few months before the acquisition of Hamburg Süd by Maersk, and as a year ago when CMA CGM acquired APL.
Mergers
On the other hand, says the lawyer, “mergers involve the absorption of a shipping line by another or the consolidation of two shipping lines to create a new company, that is, merger by incorporation.” He points out that “mergers take place after acquisitions and acquisitions – and further specifies that” this form of corporate movement differs from acquisitions, in which the acquired company disappears after the merger or as indicated, both the acquiring ship and the acquired, disappear to give way to a new corporation. ”
He points out as an example of merger by absorption “that which occurred some years ago between Maersk and Sea-Land, by which the Danish shipping company absorbed the American, liquidating it; although not long ago revived a subsidiary with the name of the acquired to operate in the intra-regional market of America.
The alliances
In the case of the shipping alliances, José Antonio Pejovés, details that it deals with “business collaboration agreements, such as consortia, joint ventures or partnership agreements”.
These alliances are part of regular shipping services and are intended to streamline activities in order to achieve economies of scale that benefit partners.
It further states that contracts that specify alliances, “generally contain stipulations of an operational and commercial nature. At the operational level, for example: exchanging containers, common use of handling equipment or port terminals; and in the commercial area, to mention some examples: sharing spaces in ships, commercial offices or agents.
In 2017, as it is known, there are three shipping alliances in the world: “2M Alliance” (Maersk-Hamburg Süd and MSC), “The Alliance” (ONE: NYK, MOL and “K” LINE; Yang Ming ; and Hapag Lloyd-CSAV-UASC); and “Ocean Alliance” (CMA CGM-APL, Evergereen and Cosco-OOCL).
It points out that “shipping alliances should not be confused with liner conferences”, which, he explains, in the context of the development of the rules on free competition – antitrust, are understood as responding to prohibited practices, United States, Europe and other parts of the world. ”
Finally, he adds that “these maritime conferences, which some authors point to that of Calcutta in 1875 as the first and which were subsequently regulated by the Unctad Code of Conduct of 1974, are no longer in force, they have been practically scrapped. “