South Korean authorities have excluded Hapag-Lloyd from the second round of bidding to acquire flagship carrier HMM.
Reports claim the creditor banks involved in the sale of HMM, Korea Development Bank and Korea Ocean Business Corp, took note of the country’s maritime community and ruled out Germany’s largest carrier as a potential suitor.
In a joint statement, the Federation of Korea Maritime Industries and Busan Port Development Association said a sale to Hapag-Lloyd risked South Korean security.
“If we sell HMM to Hapag-Lloyd, we’re concerned about the outflow of invaluable national assets, such as our country’s container transport assets, terminals and know-how accumulated over decades.
“We’re angry that Hapag-Lloyd could even be included among the preliminary bidders. HMM is an indispensable asset to our export-oriented economy.”
During the preliminary bidding stage, five prospective buyers submitted offers of around Won5trn ($3.7bn), with Hapag-Lloyd considered a frontrunner due to its $7bn balance sheet. But now, all eyes have turned towards what looks like a three-way battle between domestic firms Dongwon, Harim and LX Holdings.
While LX and Dongwon have interests in logistics, Harim Group controls Korean carrier Pan Ocean and has teamed with a private equity firm in its bid for the 57.87% stake in Korea’s largest box carrier, which fell under government control in a 2016 debt-for-equity swap.
One analyst suggested Hapag’s interest was in preserving its market share after showing the “least aggression” in ordering newbuilds – HMM’s 88-strong box ship fleet offering an alternative.
It is understood that the South Korean carrier’s creditors are keen for a sale, with due diligence now taking place on the remaining bidders in the hope of a winner being announced by November.
Representatives of the German carrier had not responded to requests from comment as this story went to press.
