Japanese Shipping Companies to Merge Container Operations

Japanese shipping companies NYK, Mitsui OSK Lines (MOL) and Kawasaki Kisen Kaisha (K-Line) said on Monday they will merge container shipping operations to integrate their respective container shipping on an equal footing. They will form a joint venture with an annual cost benefits of about 110 billion yen ($1.05 billion) and will take advantage of scale through its combined fleet of 1.4 million TEUs. The merger will make the group the sixth largest carrier in the world with aproximately seven percent of global capacity, according to estimates from Alphaliner.

Shares in the companies - whose combined fleet of over 2,000 vessels includes tankers, dry-cargo carriers and container ships - jumped almost 10 percent after news that their presidents would hold a news conference at 0200 GMT.

The Japanese joint venture, to be owned 38 percent by NYK and 31 percent each by MOL and K-Line, will be formed on July 1, 2017, and begin operations in April 2018, they said in a joint statement. Shares of NYK rose as much as 9.9 percent, MOL by 9.2 percent and K-Line as much as 8.5 percent.

(MarEx)