Maximising synergy: COSCO Shipping acquires stake in major German container terminal
COSCO Shipping is stepping up in the logistics market of the European Union. It will purchase the minority share of 35 per cent in HHLA Container Terminal Tollerort, one of four container facilities in the Port of Hamburg. This will become the company’s eighth transhipmentч complex within the EU. The deal between COSCO Shipping and HHLA will be closed by the year’s end.
After almost 40 years of cooperation, Hamburger Hafen und Logistik (HHLA) and COSCO Shipping have reinforced their relationship. On Tuesday, 21 September, the parties concluded a remarkable agreement. According to the document, COSCO Shipping Ports, the dedicated subsidiary of COSCO Shipping, will acquire 35 per cent of shares in Container Terminal Tollerort (CTT), owned by Hamburger Hafen und Logistik (HHLA).
With the acquisition, COSCO Shipping will intensify its operations in Europe since CTT will become a ‘preferred hub’ in Europe. Currently, the German terminal handles two Far East services, a Mediterranean service and a Baltic feeder service of the Chinese shipping line. This list could be extended with the new services. “Container Terminal Tollerort has a stable and promising outlook, which will help bring stable earnings for our Company and meanwhile, maximise the synergy between our Company and liners to provide better high-quality and more efficient services for the customers,” COSCO Shipping stated. Moreover, the terminal will continue to be open to other shipping companies.
HHLA’s Supervisory Board has already approved the deal with COSO Shipping. The same must be done by various German authorities in the coming months. It is expected to be closed by the end of the current year. Five conditions must be fulfilled until that date and three of them are related to the regulations:
- applicable merger control clearances having been obtained;
- the German Federal Ministry of Economics and Energy has issued or deemed to have issued a certificate of non-objection in relation to the acquisition of the Sale Shares;
- applicable regulatory and government approvals having been obtained.
The two remaining conditions are dealt with the financial issues. For instance, HHLA will deliver to COSCO Shipping a full set of the CTT’s IFRS consolidated audited report as of 31 December 2020. Furthermore, the agreement will be put into practice if ‘no Material Adverse Change has occurred after the date of the Share Purchaser Agreement until Closing’, as the document says.
In its turn, COSCO Shipping is committed to paying 65 million euros for the sold shares to HHLA. The Chinese company will also compensate the German partner for the closing shareholder loan in the amount of more than 34.2 million euros provided to CTT as well as the interest charged on this amount for the period from 31 December 2020 until the closing date.
COSCO Shipping in Europe
CTT, which can handle the ultra-large container vessels with a capacity of more than 20,000 TEU, will add the COSCO’s network of container terminals in Europe. Currently, COSCO Shipping Ports owns various stakes of seven facilities in five EU countries as well as one facility in the European part of Turkey.
The most known transhipment complex, which is fully owned (100 per cent) by the Chinese company, is the Piraeus Container Terminal with an annual capacity of 6.2 million TEU. Its Belgian assets consist of CSP Zeebrugge Terminals (85.45 per cent) with a capacity of 1.3 million TEU and Antwerp Gateway (20 per cent) with a capacity of 3.7 million TEU. Besides Belgium, COSCO Shipping owns stakes in two Spanish facilities: CSP Iberian Valencia Terminal (51 per cent and 4.1 million TEU) and CSP Iberian Bilbao Terminal (39.51 per cent and 1 million TEU).
The other company’s assets include Euromax Terminal Rotterdam in the Netherlands (35 per cent stake and 3.2 million TEU), Reefer Terminal in the Port of Vado, Italy (40 per cent and 0.85 million TEU) and Kumport Terminal near Istanbul in Turkey (26 per cent and 2.1 million TEU).