¡¡¡¡Hapag-Lloyd, a German carrier for 160 years, brought the Pacific Lines of Canada under its full control two years ago. Exactly because of this inappropriate move, the business performance of TUI, its parent company, has been continually sliding down ever since, causing an uproar of displeasure from the shareholders who, with one mind, are eagerly calling for its sale as soon as possible. Among the potential buyers now looming are NOL, Hamburg, Maersk, COSCO and China Shipping.

¡¡¡¡NOL

¡¡¡¡So far, NOL is widely thought to be the most probable final buyer and, indeed, made a formal price offer in June. The latest news said that NOL is seeking USD 5-7 billion in loans to land a winning bid for Hapag-Lloyd. NOL concentrates its major fleets in trans-Pacific services, while Hapag-Lloyd in the Pan-Atlantic region and along routes in Asia and Europe, so combination of forces will certainly help the two complement each other in sphere of influence and ship modes. If successful, APL under NOL, can go on expanding its existing market, and Hapag-Lloyd can also extend its reach into the Pacific region.
¡¡¡¡It has been frequently hinted in news media that the two have been engaged in some senior-level talks, and one likely result is that Temasek Holdings, a State-owned investment corporation from Singapore that possesses 68% of the shares of NOL, will buy into TUI and take 23% of its total shares. Statistics reveal that, once successful, the combination will place Hapag- Lloyd-APL closely behind CMA of France to become the fourth largest liner/carrier in the world. With this shift, the market may very possibly enter a new period of violent fluctuation and adjustment.
¡¡¡¡This combination will create a story of happy trans-national union, with a significance more important than would arise form any other kinds of cooperation. The greatest challenge might come from the hidden disorder of operation with the shipping alliances: Hapag-Lloyd is a member of the Great Alliance whose shareholders include NYK, NOL and Malaysian shipping lines (and whose service coverage is mainly limited to within Asia), while APL is a member of the New World Alliance together with MOL and Hyundai Merchant Lines Ltd.

¡¡¡¡Hamburg of Germany

¡¡¡¡Nothing is certain before the final result is out, though. NOL may have the best reasons to become a success, but may also fail because of the Germans  strong sense of nationality. Though it¡¯s said that Hamburg Sud has declined to bid for Hapag- Lloyd, presently, MM Warbug (a privately-run banking group from Hamburg) together with a group of German investors and businessmen has openly expressed opposition to having Hapag-Lloyd sold to any foreigners. Kuehne Holding has even launched Verwaltung Hamburgische Seefahrtsbeteiligung Albert Ballin expressly to enter this merger war. What’s most interesting is that among its various supporters is also the municipal government of Hamburg, which has bought 20% of its total shares.
¡¡¡¡The government of Hamburg seems focussed on keeping the Headquarters of Hapag-Lloyd securely in the city, and it is indeed of much symbolic significance to such an economic power like Germany. It seems difficult for it to tear itself away from this historical brand. Politics and nationality have thus made this business matter very complex, and such pains turn out to be often unavoidable when economics meets politics.
¡¡¡¡Nevertheless, it is learned, TUI is determined to wash its hands of Hapag-Lloyd. Only the concrete way of separation remains to be discussed. Locals, they stressed, would get no special favours from the deal.

¡¡¡¡Maersk

¡¡¡¡The senior management of Maersk has also expressed recently it shall not exclude the possibility of carrying out another combination with Hapag-Lloyd, which took over the Pacific Lines of Canada two years ago with USD 2 billion. The gross value of TUI today has reached to USD 6.5 billion, an amount that may prove to be well worthy of the efforts of a shipping giant like Maersk.
¡¡¡¡The problem is that even now Maersk finds itself still not completely out of the shadow of merging with P&O Nedlloyd. Its CEO told the "Financial Times"  of U.K. in May that, Maersk Lines, which makes half the total business volume of the whole corporation, is still in the red at present. Maersk¡¯s existing service capacity is only 1.56 times that of MSC and, even when all the orders placed are taken into account, its fleet capacity will still be only 1.24 times that of MSC.
¡¡¡¡According to some reports, Maersk has indeed shown strong interest in this new possibility of combination. Its senior management is of the opinion that, considering the present distribution of container market shares, a further merger is inevitable, and only when great forces are concentrated in the very few hands can the market become comfortably stable, a view that seems to agree very well with Maersk¡¯s moves in the past.

¡¡¡¡COSCO and China Shipping

¡¡¡¡In China, COSCO and China Shipping appear strong enough to take part in this game of competition.
¡¡¡¡Both are State-owned, and new stars of the world's "Shipping Titans Club" . Fast progress over recent years has advanced COSCO and China Shipping to sixth and eighth place respectively in the ranking of international container carriers. Merging with Hapag-Lloyd presents definitely a very good opportunity to them. The service areas of Hapag-Lloyd are exactly where COSCO and China Shipping are still to reach. Besides, combining a foreign business fits most admirably China's strategy of overseas investment such as is stressed repeatedly in its economic development policies. What's more, all three are members of TSA, which makes a sound foundation for cooperation. In fact COSCO started route cooperation with Hapag-Lloyd as early as in 2005.
¡¡¡¡If COSCO is to be the buyer, the existing service capacity and new ship orders placed will rank it the third largest liner carrier in the world. The problem is both COSCO and NOL come from Asia and there may also be cultural conflicts between COSCO and China Shipping, challenges that must be overcome for such a colossal business venture.