CSAV Tie-up With Hapag-Lloyd Approved by Shareholders

Cia. Sud Americana de Vapores SA shareholders approved a proposed combination of its container shipping operations with Germany’s Hapag-Lloyd AG to create the fourth-largest container line in the world.

Shareholders that own 84.5 percent of the company’s stock voted in favor of the deal, by which CSAV will exchange all of its container shipping assets for a 30 percent stake in the Hamburg-based company. That percentage may increase to 34 percent via a $500 million capital increase in which CSAV has pledged $350 million, Chief Executive Officer Oscar Hasbun told shareholders at the meeting today in Valparaiso, Chile.

Chile’s billionaire Luksic family bet on a recovery in the global shipping industry in 2011 when it began building a stake in CSAV. Luksic now owns 37 percent. The company is seeking the combination to counter a prolonged slump in the container shipping market and compete with larger rival A.P. Moeller-Maersk A/S.

“Maersk is one of the few container shipping companies in the world that has profit and it does that by economies of scale,” Hasbun said today. “We want to reach Maersk’s level of profitability and efficiency.”

The combined company will reap annual savings of about $300 million, expand its customer base and reach more trade routes, Hasbun said. CSAV expects to sign a binding agreement in the next 30 to 40 days and close the deal by the end of 2014.

Hapag-Lloyd will undertake an initial public offering of shares to raise $500 million between 12 and 18 months after the transaction is completed, Hasbun said.

Holders that voted against the tie-up or didn’t attend the vote will have until April 20 to say if they want to be bought out of the company. If more than 5 percent of shareholders ask to be bought out, CSAV may call off the deal, Hasbun said.

Shareholders also approved today a $200 million capital increase to pay for seven new vessels being built by Samsung Heavy Industries Co (010140) Ltd.

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net James Attwood, Philip Sanders

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