Hamburg Parliament Delays Decision on Proposed MSC Investment in Port

 

In a surprise development, the Budget Committee of the Hamburg Parliament on Tuesday voted to delay its decision on the proposed deal to sell nearly half of Hamburg port operator Hamburger Hafen und Logistik AG (HHLA) to MSC Mediterranean Shipping Company. The deal had previously received approval from other committees and was expected to be presented to the full Free and Hanseatic City of Hamburg Parliament for its approval before its summer recess due to begin on July 10.

Last year the City of Hamburg reported it had reached a deal for MSC to acquire 49 percent ownership of the port company in exchange for promises of investments into the port and establishing its German headquarters in the city. The City would continue to own 51 percent, down from approximately 70 percent, and a new management company would be formed to oversee the port. City fathers were anxious for the deal as a means of enhancing the port’s competitive position and stabilizing its further outlook while politicians welcomed it as a means of raising significant money for the City.

Thilo Kleibauer, a financial executive turned politician expressed concern to the German news outlet NDR yesterday saying “MSC is using its billions in profits from the Corona period to buy ‘everything that isn't nailed down’." Others are raising concerns based on the City’s past experience with privatizations while the great-great-grandson of the city’s former mayor and founder of the modern port, politician Mathias Petersen told the news outlet BILD that he would vote against the deal cautioning if the deal is concluded it could never be reversed.

Around 50 port workers demonstrated on the town hall square before the budget committee meeting, and according to NDR, they presented a letter to the committee citing the opposition to the deal. The powerful union ver.di has also come out against the deal fearing despite MSC’s promises that there will be job losses.

During the hearing on Tuesday, Germany’s Left Party called for a public hearing on the matter before the Budget Committee vote. Under the rules, if 20 percent of the members support the motion, it would carry. Responding to the vote, the committee has now scheduled a public hearing for June 20 on the proposed deal with MSC. Experts say that it means it is unlikely that the Budget Committee would vote on the proposal before the summer adjournment.  

After a heated seven-hour debate at the end of May, the Economic Committee, and the Committee for Public Enterprises of the Citizens' Assembly, both voted in favor of the MSC deal. That was seen as a critical step to completing the sale. Petersen in that hearing had called for a reexamination of the price that MSC would be paying but failed with his opposition at that stage. Others said despite the promises they believe the City will lose control of the port if the deal proceeds.

MSC launched the acquisition last fall with a public offer for shares and reported in December that it had received nearly 10 percent in the public tender after having acquired more than 12 percent. Under the terms of the agreement, the company would acquire additional shares from the City of Hamburg. After completing the tender, it was reported the HHLA, MSC, and the City were working on finalizing the business combination agreement building on a preliminary framework.

The parties had said they hoped to complete the investment during the second quarter of 2024.