Big bang in Hamburg
No lull in the storm over MSC’s potential minority stake in HHLA. There’s no question that the Northern Range ports will have to come up with something special in the face of competition from the Western Range. A cooperation agreement between the terminal operators HHLA and Eurogate failed in 2022; now minority stakes will have to come to the rescue. The major shipowners have got full coffers. Will MSC alone buy shares in HHLA, however, as planned by Hamburg’s local government?
Excitement is the order of the day in this sanguine era. The uproar caused by the recent decision taken by the senate of Hamburg, the city-state’s government, to sell shares in HHLA to MSC has already surpassed numerous recent political cyclones, however.
Specifically, it concerns a preliminary agreement concluded by the city of Hamburg with the Geneva-based shipping line MSC. The city owns around 69% of the shares in the listed terminal operator Hamburger Hafen und Logistik AG (HHLA).
Cosco / Tollerort saga much longer
HHLA isn’t only the top dog in Hamburg, where it operates the container terminals Altenwerder, Burchardkai and Tollerort, but also has a business presence in Tallinn (Estonia) and Odesa (Ukraine). Now it’s been lined up for a transfer to a joint venture.
MSC would hold 49.9% of the shares therein, while the city of Hamburg would retain a majority stake of 50.1%. The shipping line is offering independent shareholders and funds EUR 16.75 per share in HHLA.
When the Chinese shipping and logistics group Cosco was finally allowed to acquire a minority stake of 24.99% in the Tollerort terminal through a subsidiary in June this year, the issue had already been smouldering for two years and had even been discussed at national cabinet level in Germany – with the latter then significantly reducing Cosco’s planned stake from 35%.
The much larger HHLA deal that has now been reached was quietly negotiated and prepared by the senate. Much excitement has been caused by this approach.
Many parties alienated
There’s never been a shortage of national or international candidates to acquire a stake in HHLA. According to Rolf Habben Jansen, CEO of Hapag-Lloyd, the shipping line with home advantage has made several attempts to buy shares.
The last talks and concrete proposals for an acquisition by Hapag-Lloyd took place at the beginning of 2023. Even the reserved Dutchman Habben Jansen made no secret of his annoyance – the fact that Bremerhaven and Wilhelmshaven are even mentioned as alternative hubs for the cargo flows in the region make the overall mood in Germany’s largest shipping line clear.
France’s CMA CGM has sought a stake in HHLA for years. The same applies to Klaus-Michael Kühne, not only a grandee of the industry but also a native Hamburger, heart and soul. According to press reports he now hopes the preliminary contract with MSC “can still be corrected.”
His alternative has suggested a number of stakes in several terminal operators, including HHLA and Eurogate, held by a phalanx of shipping lines. The owner of Eurogate, Thomas Eckelmann, also wants to present a counter-proposal to Hamburg’s senate.
Alternatives and other plans
Since parts of HHLA’s workforce are also opposed to MSC’s investment the conclusion of the deal isn’t a foregone conclusion yet – even though the Swiss shipping line has given assurances to both the senate and the workforce.
Local experts have more ideas. Well-informed circles have proposed “a share swap away from the Container Terminal Altenwerder towards the Burchardkai, with a simultaneous increase in the overall shareholding.”
One positive side effect of this idea is that it would avoid a planned heightening of the Köhlbrand Bridge, as Hapag-Lloyd’s ULCVs would then change their route to the port. The intermodal dimension adds another factor – competition between MSC’s Medway railway subsidiary and HHLA’s Metrans is another element.
Hamburg plays a key role as a railway port in intermodal Europe, with every second container arriving or departing there by rail. Thanks to MSC, Medway, which is only active in a few countries, would be in a position to significantly expand its position.