CMA CGM has approached Hapag-Lloyd over the possibility of merging, a deal that would create the biggest container carrier in the world, according to Reuters.
Three sources confirmed to Reuters that CMA CGM, which declined to comment on the statements, initiated talks with German rival Hapag-Lloyd, who reportedly dismissed the claims.
One source said to Reuters: “The idea which has been proposed would be a non-cash merger.”
Another said: “The group of key shareholders holding the Hapag majority do not want a deal right now.”
Hapag-Lloyd denies that there has been any discussion of a merger, saying the rumours are “without substance”.
A third source said: “The sense is that there was nothing in it for Hapag’s principal shareholders”.
However, if the third and fifth container carriers merge, the size of the resulting company would far surpass Marsek Line as the world’s biggest.
Hapag suffered huge losses in late June and early July after it slashed its full-year profit forecast, for which it blamed rising freight rates and fuel prices.
A trade war between the US and China is a potential threat to the industry, as is the continuing oversupply of vessels.
Many container shipping companies consolidated by means of mergers, acquisitions and alliances in 2017 to avoid facing the same fate of South Korea’s Hanjin Shipping, which went bankrupt.
This industry trend included Hapag-Lloyd completing a takeover of Gulf liner United Arab Shipping Company (UASC) in March 2017.
Its Chief Executive, Rolf Habben Jansen, said in May that he did not expect any large mergers in 2018.