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Maersk may seek M&As of Hanjin and Hyundai

Posted September. 28, 2016 07:29,   

Updated September. 28, 2016 07:41

한국어
Maersk Line, the world’s No. 1 shipping company based in Denmark, could seek to take over Hanjin Shipping and Hyundai Merchant Marine, a U.K. investment bank predicted. However, majority of sources in the Korean shipping industry predicts that Maersk may be able to acquire a portion of assets, but it would be difficult to achieve full-blown M&As of the Korean companies.

David Custance, an analyst with the investment bank Jefferies International, said Bloomberg on Tuesday that Maersk Line will likely seek to take over Hanjin Shipping and Hyundai Merchant Marine. Custance was quoted by Bloomberg as saying that Maersk will participate in M&A bids as the shipping industry leader, and it will have to, adding that while both Hanjin Shipping and Hyundai Merchant Marine in difficult situations need strong partners, Maersk would be the only shipper capable of doing such things. The analyst also said that as the choices Maersk can take are limited, the most likely scenario is for Maersk to take over assets of Hanjin shipping and Hyundai Merchant Marine.

However, many shipping industry insiders say that there are many hurdles to overcome to achieve a large-scale M&A. For one, even if Hanjin Shipping survives, chances are high that it will only become a medium-sized shipping company operating mostly in the Asian region, and in the worst case scenario, it would be liquidated in line with court decision. If the court judges that Maersk’s acquisition of Hanjin Shipping’s assets is beneficial to creditors even to a small extent in the course of liquidation, takeover can be done, but what Maersk will gain from the deal would not be significant. Also, this is not in compliance with the Korean government’s intention to ensure Hyundai Merchant Marine will take over sound assets from Hanjin Shipping.

Moreover, chances are not high that Hyundai Merchant Marine will seek to sell its assets to outsiders since it has started strengthening competitive edge after recently concluding restructuring. Additionally, it is very unlikely that the state-run Korea Development Bank, the majority stakeholder of Hyundai Merchant Marine, will hand over assets of Hyundai, which should serve as the nation’s only flagship shipping firm, to an overseas buyer. “Custance’s prediction is believed to an analysis in principle about various strategies that Maersk will seek,” said Cho Bong-ki, an executive director at the Korean Shipowners’ Association.



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