By Jacob Gronholt-Pedersen

COPENHAGEN, Dec 1 (Reuters)– Maersk Line, the globe’s most significant delivery business, is to acquire smaller sized opponent Hamburg Süd, signing up with a wave of M&A in the market simply over 2 months after the Danish business exposed strategies to strengthen its transportation procedures.

The bargain, revealed by moms and dad A.P. Moller-Maersk on Thursday, is the team’s very first complete requisition in greater than a years and also highlights a loan consolidation drive in container delivery, which has actually been facing reduced products prices and also surplus.

It additionally complies with Maersk’s brand-new manager Soren Skou’s relocate to concentrate on transportation and also logistics and also dilate the business’s power procedures.

Maersk shares increased greater than 5 percent.

Hamburg Süd, component of the Oetker Group, is the globe’s 7th biggest container delivery line and also runs 130 container vessels mostly in profession in between the north and also southerly hemispheres. Maersk has a fleet of greater than 600 ships.

“This will provide us with a very strong platform in Latin America,” Skou, president of Maersk Line and also the Maersk Group, claimed on a teleconference, keeping in mind “significant” price take advantage of integrating the firms’ network.

Skou decreased to reveal the worth of the bargain, however claimed it would certainly be a cash money just purchase, which Maersk did not require to offer various other properties to in advance with the acquisition.

He additionally claimed Maersk would certainly be taking a look at a “light-touch integration” of family-owned Hamburg Süd, maintaining both the brand and also the business’s head office in Hamburg.

“I would imagine that more (consolidation) can happen in the future. Even with this acquisition, the market is still quite fragmented, and I would be surprised if this was the final piece,” Skou claimed.

With the purchase, Maersk Line will certainly raise its container ability to around 3.8 million TEU (20-foot Equivalent Unit), increasing its market share to 18.6 percent from 15.7 percent, it claimed.

Maersk’s incorporated fleet will certainly include 741 container vessels with an ordinary age of 8.7 years, compared to 9.2 years prior to the bargain.

The purchase will certainly aid Maersk Line to enhance its visibility in international profession, specifically in Latin America where Hamburg Süd has actually had a solid visibility given that its structure in 1871 by reps of Hamburg vendor homes.

“It’s a smaller and more niche player – it’s a good strategic fit for Maersk,” expert Michael Jorgensen atAlm Brand Bank claimed. He explained the purchase as a protective combination.Alm Brand has a “buy” referral on Maersk.

Hamburg Süd has 5,960 staff members in greater than 250 workplaces throughout the globe. Last year, the business’s income was $6.73 billion and also of that $6.26 billion originated from its container line tasks, Maersk claimed.

Oetker Group is associated with delivery, financial, food and also drinks. There had actually been conjecture in the delivery market that the Oetker- household would decide to offer its container service.

“Giving up our engagement in shipping after an 80 year-long ownership in Hamburg Süd was not an easy decision for my family,” claimed August Oetker, chairman of the board of advisers behind the monitoring holding business of the Oetker Group.

The bargain will certainly be the very first complete purchase by Maersk given that a requisition of P&O Nedlloyd a years earlier.

Other container lines have actually been aiming to do bargains to construct range. Family- possessed French team CMA CGM secured a procurement this year of Singapore- based Neptune Orient Lines, which has actually provided it market management on trans-Pacific paths.

Last week, the European Commission provided conditional authorization to a merging in between German container delivery line Hapag-Lloyd and also the United Arab Shipping Company.

In 2013, a prepared merging in between Hapag-Lloyd with opponent Hamburg- Süd was aborted as terms might not be concurred.

Maersk claimed the bargain would certainly undergo last arrangement and also regulative authorizations, and also would certainly have no effect on Maersk’s overview for 2016.

A.P. Moller-Maersk claimed it anticipated to offer even more information adhering to authorization of the acquisition arrangement which is anticipated early in the 2nd quarter of 2017. (Reporting by Jacob Gronholt-Pedersen; added coverage by Annabella Pultz Nielsen and also Nikolaj Skydsgaard in Copenhagen and also Jonathan Saul in London; editing and enhancing by Jason Neely and also Jane Merriman)

( c) Copyright Thomson Reuters 2016.