Hapag-Lloyd close to buying Chilean carrier

[FRANKFURT] German container shipping company Hapag-Lloyd is nearing a deal to buy Chilean carrier Compania Sud Americana de Vapores, a German newspaper reported. "We want to reach an agreement by the end of January," a Hapag-Lloyd manager told Die Welt, according to a pre-release of yesterday's edition.

Vapores, which has a market capitalisation of US$845 million, confirmed in December that it had entered merger talks with Hapag-Lloyd, as it is grappling with steep losses caused by low freight rates, high fuel prices and expensive leases. Under the deal, Vapores will take a 30 per cent stake in Hapag-Lloyd, the newspaper reported, adding that it was still unclear whether Vapores' 54 ships will be part of the transaction or whether they will just be leased to the German peer. Hapag-Lloyd has 152 ships on its own. Hapag-Lloyd declined to comment, while Vapores was not immediately available for comment.

Earlier this year, the owners of unlisted Hapag-Lloyd called off a planned merger with rival German carrier Hamburg-Sued because terms could not be agreed. At the time, major Hapag-Lloyd shareholder Klaus-Michael Kuehne had said that the combination between the German peers was attractive, arguing it made sense to bolt Hapag's Asia focus to Hamburg-Sued's strength on South American routes. In the newspaper report, Mr Kuehne is quoted as saying: "I see good chances of clinching a deal (with Vapores)."