Dive Brief:
- Maersk Line’s acquisition of Hamburg Süd was approved by Brazilian regulators without restrictions, surprising many who expected high priced requirements much like those imposed by the European Union, JOC.com reported.
- The Conselho Administrativo de Defesa Econômica (Cade), the Brazilian arm of the government managing mergers and acquisitions, announced its approval in the September 24 edition of the Diário Oficial da União, an official government gazette, imposing no "terms or conditions."
- Prior to Sunday's approval, Cade insisted that Maersk sell its Mercosul Line, the Brazilian and east coast of South America (ECSA) cabotage operator. Without the sale of Mercosul, Maersk and Hamburg Süd would have controlled 80% of the ECSA market. Maersk sold Mercosul to CMA CGM in April.
Dive Insight:
The Maersk- Hamburg Süd deal is overcoming international obstacles, despite industry skepticism.
Maersk's acquisition of Hamburg Süd caused debate over Maersk's growing market share of 18.6% of global container trade, up from 15.7% pre-purchase. As a result, the line was quick to divest assets demanded by the European Commission in an effort to gain sale approval, which ultimately resulted in the line's withdrawal from five vessel sharing and slot exchange consortia on European trade lanes. To gain the slow-in-coming Brazilian approval, Maersk sold its cabotage subsidiary Mercosul, without which it would have controlled 80% of trade to Brazil.
Despite that sale, industry experts remained convinced that Brazil would impose further sanctions. "The extension of the review by the Brazilian authorities was due to the complexity of the deal," research analyst Chris Rogers of Panjiva told Supply Chain Dive. "Further analysis of Maersk's sale of its cabotage business to CMA CGM clearly met their concerns."
Rogers concluded, "I am surprised though as the deal makes the Brazilian shipping market one of the most consolidated in the world."
