Shipping Companies Terminate Merger Following DOJ Antitrust Investigation
Commentary by Bernard Nigro
Shipping company China International Marine Containers Group Co. Ltd. terminated its intended acquisition of Maersk Container Industry A/S and Maersk Container Industry Qingdao Ltd. following the results of a DOJ antitrust investigation.
According to the DOJ, the merger would have consolidated over 90 percent of the insulated container box and refrigerated shipping container industry in Chinese state-owned or state-controlled entities. The DOJ said that the proposed transaction would have combined two of the only four total suppliers of insulated container boxes and refrigerated shipping containers in the world. The DOJ expressed concern that the merger would have further concentrated the global shipping supply chain and would have removed a significant aspect of competition from the industry.
The DOJ's investigation was conducted in cooperation with the German Federal Cartel Office, the country's national competition regulatory agency.
Commentary
In its press release announcing the abandonment of the deal, the DOJ said that it was particularly concerned about the close relationship among the Chinese entities. Specifically, the DOJ noted that the transaction would have consolidated over 90 percent of the insulated container box and refrigerated shipping container production in Chinese state-owned or state-controlled entities and "would have substantially increased the risk of coordination among the remaining suppliers in the marketplace, most of whom would have been aligned through common ownership and related alliances."