Dive Brief:
- Sources familiar with Maersk's business operations told the Wall Street Journal reports of the shipping line's potential acquisition of Hanjin assets were unfounded, according to a Monday report.
- Based off an interview with a Jefferies analyst, Bloomberg reported the major shipping line would likely pursue Hyundai Merchant Marine (HMM) and Hanjin Shipping Co. assets, since most other takeover candidates are in a shipping alliance. Hanjin's shares spiked 40% following reports of the speculation.
- Yet the Journal's sources claim Maersk's strategy is to pursue low-price buyouts by waiting for beleaguered shipping companies to come knocking before making an offer.
Dive Insight:
Just under two weeks ago, Maersk's parent company made the surprising announcement that it would split its oil company from its shipping and logistics providers, in order to free the latter to pursue acquisitions without additional fiscal concerns. That, in turn, threw investors into a waiting-cycle to see who Maersk Line's next target would be.
Hanjin and HMM were the natural first candidates: the split came at the heels of a month-long shipping crisis sparked by Hanjin's bankruptcy reveal and a credit restructuring by HMM. South Korea, meanwhile, has by and large refused to bailout Hanjin, leaving the shipper to pursue liquidity in the private market.
So far, Hanjin has secured potential ship purchases from HMM, various loans, and sent some ships to the scrap yard in its quest to beat bankruptcy and become a regional shipper. Yet, every day of held cargo cost the company up to $2 million in claims, according to one report, so the company's fate is still very much in question.
Even if sources are publicly rejecting the rumors, Hanjin may soon find itself begging for a takeover, and may very well end up as part of Maersk Line.
Of course, it's worth noting Korean shippers are not alone. Various reports have highlighted the shipping industry's general struggles, and many companies are toeing the line of bankruptcy. The merger speculation is not likely to end anytime soon.
