Hapag-Lloyd chairman says Hamburg-Sued should join merger talks

FRANKFURT Thu Dec 26, 2013 2:48pm EST

A company logo of German tour operator Hapag-Lloyd is pictured at its head office in Hamburg December 6, 2013. REUTERS/Morris Mac Matzen

A company logo of German tour operator Hapag-Lloyd is pictured at its head office in Hamburg December 6, 2013.

Credit: Reuters/Morris Mac Matzen

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FRANKFURT (Reuters) - The chairman of German shipping group Hapag-Lloyd HPLG.UL said rival Hamburg-Sued should join merger talks between Hapag-Lloyd and Chile's Vapores VAP.SN.

"The three of us together would be stronger," Hamburger Abendblatt quoted Juergen Weber as saying in an excerpt from an article to be published on Friday.

Hapag-Lloyd, the world's No.5 container shipping company by capacity, earlier this month said it was in talks to merge with smaller Chilean shipper Compania Sud Americana de Vapores, adding that no agreement had yet been reached.

Shipping groups have been struggling through the worst slump on record, with the weak global economy, oversupply of vessels and low freight rates highlighting the benefits of consolidation in the sector.

Hapag-Lloyd, burdened by 2.35 billion euros ($3.2 billion) of net debt and a nine-month net loss of 56 million euros, already held talks with Hamburg-Sued last year, but the parties were unable to agree terms.

The deal would have created the world's No. 4 player behind Maersk Line, part of Danish conglomerate A.P. Moller-Maersk (MAERSKb.CO), Switzerland's Mediterranean Shipping Company and France's CMA CGM CMACG.UL.

Weber told Hamburger Abendblatt that he hoped Hapag-Lloyd's talks with Vapores would be a "warning and motivation" for Hamburg Sued's owner, the Oetker family, to rekindle talks.

He also said the owners of Hapag-Lloyd still aimed to float shares in the German shipping company in an initial public offering, though that was "hardly possible" before the end of 2014, among other because a new chief executive is due to take the helm next year.

Officials for Hamburg-Sued were not immediately available for comment.

The city of Hamburg holds 36.9 percent of Hapag-Lloyd, while Klaus Michael Kuehne, who also controls Swiss logistics group Kuehne & Nagel (KNIN.VX), owns 28.2 percent. German travel group TUI AG (TUIGn.DE) owns a 22 percent stake.

(Reporting by Maria Sheahan; editing by Andrew Hay)