Berlin, Frankfurt, Düsseldorf The planned partial sale of the Hamburg port operator HHLA to the Swiss shipping company MSC is causing trouble in the Hanseatic city. “This solution is an affront, especially to Hapag-Lloyd as the largest user and therefore the largest shipping company customer of the Port of Hamburg,” criticized Swiss billionaire Klaus-Michael Kühne on Wednesday.
The 86-year-old is a major shareholder with 30 percent of the Hamburg container shipping company Hapag-Lloyd and had recently expressed his own interest in acquiring HHLA in several newspaper interviews.
“I can only strongly advise Hapag-Lloyd to immediately submit a takeover offer for 49.9 percent of the HHLA shares,” explained Kühne after the MSC offer was published. “If Hapag-Lloyd wouldn’t do it, my Kühne Holding AG is considering doing it in the short term.”
It is uncertain whether such a counteroffer would even have a chance. According to MSC, number one on the world’s oceans with 759 container ships, there is already a “binding agreement” with the Hanseatic city that regulates the basic terms of the takeover offer “as well as the parties’ common intentions and agreements with regard to the company.”
MSC and the city surprisingly announced the partnership on Wednesday morning. The Swiss-based company is offering 16.75 euros per HHLA stock-traded security. HHLA’s equity is valued at 1.2 billion euros, which corresponds to five and a half times the operating profit (EBIT) of 2022. The company value including debt is 2.6 billion euros.
MSC did not specify a minimum acceptance threshold in order to avoid speculation on the stock market. According to the agreement, the city state should continue to hold 50.1 percent of HHLA and thus retain control.
Hamburg’s Senator for Economic Affairs Melanie Leonhard (SPD) clearly rejected Kühne’s statements that afternoon. “I don’t see any affront in it,” she told Handelsblatt. The concept with MSC serves HHLA and the port location.
MSC wants to handle more containers in Hamburg
Ultimately, MSC made commitments to HHLA’s capacity utilization in the partnership, which was initially intended to last 40 years. The port of Hamburg is under fierce competition from other ports such as Rotterdam and Antwerp.
MSC is committed to shipping 500,000 standard containers annually via HHLA from 2025, and the volume is expected to double to one million standard containers (TEU) by 2030. To put it into perspective: in 2022, HHLA handled just 6.4 million TEU in its ports, which also include terminals in Odessa, Trieste and Tallinn.
At the same time, MSC is setting up its German headquarters in Hamburg, from where the group will also manage the German freight, logistics and cruise business (MSC Cruises) in the future and thus create 300 jobs.
MSC CEO Soren Toft, who announced the deal on Wednesday, is considered an experienced expert in the Hanseatic city. In 2017, the now 49-year-old Dane, who at the time was still working as COO for the Copenhagen shipping company Maersk, orchestrated the takeover of Oetker’s container shipping company Hamburg Süd.
Hapag-Lloyd left an inquiry about Kühne’s proposal for a counteroffer unanswered. “Hapag-Lloyd takes note of HHLA’s announcement that the MSC Group is making a voluntary public takeover offer,” said the head of the Hamburg shipping company Rolf Habben Jansen. “We assume that this will not affect our cooperation with HHLA.”
But the criticism of the deal, which was prepared by Rothschild and Allen Overy on the part of the Hanseatic city, while MSC received support from Commerzbank and Freshfields, is unmistakable.
Kühne accuses the Senate of his hometown of being half-hearted. “The entrepreneurial management of HHLA continues to lie with the city of Hamburg according to the motto ‘port economy equals state economy’,” complained the majority owner of the freight forwarding giant Kühne + Nagel, which operates its headquarters next to Kühne’s residence in Schindellegi on Lake Zurich for tax reasons.
“First access to a minority stake in HHLA should of course have been given to a real Hamburg company like Hapag-Lloyd,” demanded Kühne. In addition, the interests of his Swiss Kühne Holding AG are known.
Criticism also comes from the opposition
The fact that Kühne had offered in newspaper interviews in recent days to take over the majority of HHLA with his holding company or Hapag-Lloyd suggests that he was privy to the sales plans. He doesn’t say anything about it himself.
>> Read also: Kühne describes the HHLA partial sale as an “affront” – and brings a counteroffer into play
The freight forwarder and major Lufthansa shareholder, known for his thrift, had publicly promised half a billion euros as the purchase price, which was apparently not enough for the Hanseatic city. The now announced deal with rival MSC now values the Hamburg port operator at least 200 million euros more. In addition, Hamburg’s first mayor, Peter Tschentscher (SPD), stated that they could not imagine giving up the majority in HHLA, as Kühne is demanding.
But Economics Senator Leonhard also immediately blocked Kühne’s adjusted offer of only wanting to take over 49.9 percent of HHLA. She pointed out that only around 30 percent of HHLA shares are currently traded on the capital market. Around 70 percent belong to the city of Hamburg, and the Senate remains clearly committed to MSC. “Mr Kühne seems to want to bid on 49 percent, which is not currently on offer.”
The Hamburg native is a major shareholder in MSC rival Hapag-Lloyd.
(Photo: dpa)
However, massive criticism comes from port policy rapporteur for the FDP parliamentary group and Hamburg member of the Bundestag, Michael Kruse. “The mayor is squandering HHLA for nothing and is ruining the future of the port of Hamburg,” he complained. “The years of inaction in port policy have put the mayor under pressure and are now causing him to present a half-baked construction,” believes Kruse.
MSC’s participation in HHLA’s parent company makes it impossible to more intensively connect other shipping companies to the location and, of all things, brusquely offends the Hamburg shipping company Hapag-Lloyd. At the same time, this investment would not even return HHLA to its old value, he criticized.
The port operator was listed on the stock exchange in November 2007 with a value of 4.4 billion euros. Before the MSC offer it was only traded at just 840 million euros, the takeover offer improved the current market value to just 1.21 billion euros.
“The only thing that can protect the people of Hamburg is a higher offer from another shipping company,” Kruse agrees with Hamburg native Klaus-Michael Kühne. In fact, the announcement of a counterbid caused HHLA’s share price to rise to 17.20 euros on Wednesday, which was almost half a euro higher than MSC’s offer.
Those in charge of the red-green-led Hamburg Senate previously tried to smooth things over in a press conference: “This is a partnership that is not directed against anyone,” said Finance Senator Andreas Dressel (SPD). “We want to continue the partnership with Hapag-Lloyd.” Important location and job guarantees have been agreed with MSC. The city also retains the right to propose the CEO position and the chairmanship of the supervisory board at HHLA.
Berlin should not interfere
The deal is still spicy: the Hanseatic city itself holds 13.9 percent of the shares in the Hamburg shipping company Hapag-Lloyd, which, according to its major shareholder Kühne, is the main victim of the deal. In the spring this gave it a dividend of 1.5 billion euros. A setback for the shipping company would directly affect the city treasury.
Hapag-Lloyd has also been a minority shareholder in the HHLA container terminal Altenwerder (CTA) for years. The Swiss competitor will now primarily decide on the most modern terminal in the port of Hamburg.
The Federal Financial Supervisory Authority (Bafin), the antitrust authorities and the Hamburg parliament still have to approve the agreement. However, at least a veto by the federal government is not to be expected.
The Hamburg port has moved into Berlin’s focus since the Chinese state shipping company Cosco entered the Tollerort terminal – one of the three HHLA terminals in the Elbe harbor. But behind the Swiss MSC there is an Italian family of owners.
The Mediterranean Shipping Company, the official shipping company name, was founded in 1970 by the Neapolitan sailor and naval officer Gianluigi Aponte. The now 83-year-old multi-billionaire moved to Geneva after marrying his Swiss wife, but is considered an EU citizen. Although the HHLA terminals are critical infrastructure, there is unlikely to be a separate investment review by the federal government.
In any case, Berlin sees the announcement as fundamentally positive. The federal government’s coordinator for the maritime economy, Dieter Janecek (Greens), told the Handelsblatt: “The takeover offer is a good signal and shows the attractiveness of the Port of Hamburg as a future location for logistics and the maritime economy as a whole.” In general, the German ports to recognize a “spirit of optimism”.
The large shipping company’s entry into the port operator HHLA is causing unrest.
(Photo: imago images/Rupert Oberhäuser)
In Hamburg, Janecek is likely to be in the minority with this view. HHLA only issued a profit warning for the current year at the end of July because the company expects a sharp decline in container throughput this year. The Elbe port has been losing market share to its larger competitors Rotterdam and Antwerp for a long time. In addition, the economic downturn in Germany and the Russian embargo are leaving scratches on the balance sheet. In the first half of 2023, operating profit fell by more than 55 percent.
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