Chinese regulators are poised to give the green light to a giant shipping alliance between the world's three biggest container operators this month, according to people familiar with the matter, a move that would allow the alliance to start operating as early as the Fall.
Earlier Wednesday, European regulators said they wouldn't raise antitrust issues with the deal, leaving Chinese approval as the only remaining, major regulatory hurdle. U.S. regulators said they wouldn't object to the tie-up a few months ago.
A spokesman for European Competition Commissioner Joaquín Almunia said the watchdog wouldn't open antitrust proceedings against the so-called P3 alliance, a tie-up proposed by Denmark's A.P. Moeller Maersk's, France's CMA CGM and Swiss-based Mediterranean Shipping Co. The three companies have agreed to share ships, routes and logistics in a deal that would concentrate their control over some of the world's busiest trade routes. The trio are already the world's three largest container shippers by capacity.
Chinese regulators are expected to give the thumbs up later this month, according to two people familiar with Beijing's thinking. The Chinese haven't yet ruled on a shipping tie-up of this size and complexity and waited to see how the U.S. and Europe would respond, said one of the people familiar with the matter. Now, that they both have agreed, it is expected the Chinese will too by the end of the month, this person said.
Maersk Chief Executive Nils Andersen told The Wall Street Journal late last month the company hadn't received any negative feedback in its talks with Chinese regulators, suggesting to the company that the review was going smoothly.
If the tie-up is completed, the three partners will move up to 40% of all cargo transported from Asia to Europe and across the Atlantic and Pacific oceans. The U.S. Federal Maritime Commission approved the P3 in March.
Akin to a code-sharing deal between airlines, the alliance will allow the three to cut billions of dollars in annual costs by using each others' ships and port facilities. It will also play on each shipper's geographic strengths to move cargo faster and more cheaply. Stopping short of a full-blown merger, the shippers have agreed to jointly deploy 255 vessels between the three of them, sharing capacity of 2.6 million containers along the busiest sea routes.
Though such alliances aren't new, smaller shipping companies, cargo forwarders and fuel suppliers have pressed regulators to rule against this much larger combination, worried they will lose leverage when negotiating their rates.
source: The Wall Street Journal