MSC Gets Final Approval for Investment in Hamburg Terminal Operator HHLA
The final regulatory approval has been granted for MSC Mediterranean Shipping Company to proceed with its investment in Hamburg, Germany-based HHLA (Hamburger Hafen und Logistik) setting the stage for a significant shift in the European logistics market. MSC now has seven business days to pay for the shares tender in the company from the public and then it will complete the acquisition with the City of Hamburg.
HHLA reported today, November 15, that all the closing conditions for the voluntary public takeover have been fulfilled. The last outstanding condition was merger control clearance from Ukraine where HHLA has an investment in a terminal in the Port of Odesa. The Europe Commission and the Parliament of Hamburg previously cleared the investment deal.
MSC will now pay the offer price of €16.75 per class A share to the HHLA shareholders who had tendered their shares in the public takeover offer which was completed in December 2023. Holders tendered approximately 10 percent of the shares while MSC had acquired an additional 12 percent in open market transactions.
Under the terms of the agreement, MSC will acquire the additional shares from the City of Hamburg to give it a total of 49.9 percent of the ownership of HHLA. The City of Hamburg will retain 51.1 percent ownership and they have formed a working agreement for the management of HHLA.
MSC has agreed to a capital infusion into HHLA which will be invested in the modernization and expansion of the operations. In addition to the terminals in Hamburg, the company has an inland logistics network and international investments.
The pending completion of the investment comes as HHLA recorded positive growth in the first nine months of 2024 rebounding from challenges in the past few years. Revenues were up 8.5 percent to nearly €1.2 billion (US$1.32 billion) in the nine months. Operating revenue at the logistics portion of the business is driving the overall growth with earnings before taxes and minority interest up nearly 32 percent. Container volumes at the Hamburg terminals were basically flat for the nine months versus last year at just under 4.5 million TEU. HHLA cites the disruptions from the war in Ukraine and more recently the impact of the rerouting of containerships from the Red Sea which has impacted scheduled to Northern Europe.
HHLA cited a significant rise in transport volume, higher storage charges at the Hamburg container terminals due to temporarily longer container dwell times, as well as the expansion of the European network. Feeder traffic they reported saw a particularly strong rise in container throughput from Lithuania and within Germany in addition to a recovery in Swedish and Polish traffic. By contrast, Finnish and Danish cargo volumes declined.
The company raised its financial outlook for the year at the end of October and commented that it expects a slight year-on-year increase in container throughput in 2024. A significant increase is projected for container transport.
The investment from MSC was positioned as a key step to help the operator address growing competition, especially in Northern Europe, and the need for modernization and investment in the port operations. MSC has also committed to growing its volume at the Port of Hamburg and establishing its Germany headquarters in the city.