21st August 2005, 16:52
Various wire services are reporting that the German travel and shipping company TUI AG has purchased CP Ships for $2Bn US. TUI AG own Hapag-Lloyd and the combined companies, after the merger is complete, will have 139 ships and 17 on order, putting them in the top five shipping companies worldwide.
Canadian Pacific, Hamburg-America and North German Lloyd---some famous names from the past there.
22nd August 2005, 15:13
Confirmed in todays press Bruce. Two additional pieces of information about the deal. The combined fleet will be the fifth largest container operators (Not shipping companies) if the deal is cleared by the regulators and the price is 1.7 billion euros cash. TUI is one of the the largest tourist businesses in the world, owning Thomson Holidays and Britannia Airways in UK.
The package holiday industry is in a bad way and TUI has been badly hit because it bought rival operators at the top of the market. Its holiday business has shrunk leaving Hapag-Lloyd currently accounting for 25% of its total business. I am afraid that it may be repeating its misfortunes by purchasing CP Ships at the top of the market.
The shipbroker Clarksons has reported that shipping profits soared to $80 billion last year, with companies flooding shipyards with new orders also costing $80 billion. As these new ships enter the market, freight rates are likely to weaken. It is significant that both P&O and CP have sold their fleets for cash.
12th September 2005, 06:28
Yeah, I tend to agree with Fred; container shipping has done very well in recent years largely as a result of its own efficiency in providing cheap transport to an increasingly global economy. I believe that quite a lot of sophisticated products actually traverse the globe a few times, as various stages in the production process are carried out in different localities, before making the final journey to the end consumer. With the end of cheap oil as a result of supplies peaking, and being further exacerbated by various troubles in the world, this is unlikey to continue. Whilst it is always sad to see a traditional owner exiting the market, business wise they have probably made the smart move.