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Purpose of the notification of the proposed acquisition
The ECOWAS Regional Competition Authority (ERCA) received a merger notification from Halag-Lloyd Aktiengesellschaft (HLAG) including its affiliated entities, concerning the Acquisition of sole control of ZIM Integrated Shipping Services Limited (ZIM) and its controlled undertakings.
The proposed transaction would give HLAG sole control of ZIM Integrated Shipping Services and is therefore subject to notification to ERCA under Regulation C/REG.23/12/21. HLAG will carry out the transaction through its wholly owned Israeli subsidiary, Norazia (Israel) Ltd., which will merge into ZIM and cease to exist as a separate entity. ZIM will become a wholly owned subsidiary of HLAG and continue as the surviving company, providing container liner shipping and related services, including logistics services such as freight forwarding.
The notification of the transaction to ERCA, for the purpose of prior authorization, is in accordance with Article 2 (1) (a) of Regulation C/REG.23/12/21 on the rules of procedure for mergers and acquisitions in ECOWAS, the Enabling Rules PC/REX.1/01/24 on the threshold for mergers and acquisitions; and the thresholds for dominant and monopolistic positions. As the acquisition involves entities in ECOWAS member States, it is, therefore, subject to notification to ERCA under the provisions of Regulation C/REG.23/12/21.
Concerned parties
HLAG is a is a German stock corporation, listed on the Frankfurt Stock Exchange and the Hamburg Stock Exchange (ETR: HLAG), a global liner shipping company, offering global transport services for containerised (reefer and dry) cargo under the Hapag-Lloyd brand. It also provides global door-to-door and port-to-port containerised cargo services and terminal operations for HLAG and other shipping line customers
HLAG is a shareholder in 22 terminals in Europe, North America, Latin America, Asia and Africa, and provides complementary logistics services at selected locations in addition to the terminal activities. HLAG as the parent company of HLAG group has five major shareholders and a small free float.
HLAG controls companies incorporated within the Community market and provides container liner shipping services to and from various ports in West Africa, including ECOWAS Community Market ports in Benin, Ghana, and Nigeria. In the Community market, HLAG also provides shipping agency, ship-broking, transport and logistics, and other ship agency-related services.
The ZIM Integrated Shipping Services limited (Target) is a public company listed on the New York Stock Exchange in the United States incorporated and headquartered at 9 Andrei Sakharov St. (Matam Center), P.O. Box 15067, Haifa 3190500, Israel.
ZIM Integrated Shipping Services Limited (the Target) is primarily active in container liner shipping and related services, including logistics such as freight forwarding. The company operates globally in more than 90 countries, serving over 30,500 customers. It operates approximately 128 vessels and maintains a substantial container fleet. Through its wholly owned subsidiary, Gal Marine Ltd., ZIM provides storage, leasing, maintenance, and repair services for dry freight and reefer containers in Israel.
Within the Community market ZIM provides container liner shipping services from and to various ports in the West Africa region, including ports in the ECOWAS Community Market, such as in Benin, Ghana, Cote d’Ivoire, Togo and Nigeria. It further through its controls of firms incorporated in the ECOWAS Community Market, partners with land transportation operators to provide a range of inland transportation services via rail, truck and river barge, often combining multiple modes of transportation.
Concerned Acquisition
The proposed transaction concerns the acquisition of sole control of ZIM Integrated Shipping Services Ltd., whose activities in the Community market include container liner shipping and related services, including logistics services such as freight forwarding.
Expected results of the acquisition
The proposed transaction will result in HLAG acquiring sole control of ZIM Integrated Shipping Services Limited and its undertakings within the Community market. This will enable HLAG to control ZIM as a subsidiary and allow both companies to combine their strengths to provide customers with improved quality of service and a broader, more seamlessly connected network, while strengthening financial resilience in a challenging market environment.
The transaction is also expected to enable the merged entities to compete more effectively with the largest container liner shipping companies by improving efficiency and economies of scale. This should help the combined entity narrow the unit cost gap with the top four global carriers to approximately 2–3%, thereby promoting competition and offering customers more choice.
Rights of third parties
Pursuant to Article 44 (2) (a) (iv) of the ECOWAS Regional Competition Authority’s Manual of Investigation and Notification Procedures, third parties are invited to submit their comments to ERCA within thirty (30) days of the publication of this communication.
Such comments shall be accompanied by any documentation capable of substantiating the facts and analyses and sent confidentially to the following address:
ECOWAS Regional Competition Authority
Bertil Harding, Bijilo, The Gambia
P.O Box 4470
Or electronically at the following email address: registry@erca-arcc.org.