The European Commission has approved the creation of a joint venture between Japan’s shipping giants Nippon Yusen Kabushiki Kaisha (NYK), Mitsui O.S.K. Lines (MOL), and Kawasaki Kisen Kaisha (K Line).
“The Commission concluded that the proposed acquisition would raise no competition concerns given the limited impact of the transaction on the routes to and from Europe and the fact that there would be sufficient competitive pressure from other competitors post transaction,” the EU Commission said.
The approval comes weeks after the South African Competition Commission blocked the deal having found that the structure of the container liner shipping market “is conducive to coordination based on previous collusive conduct in the container liner market in other parts of the world.”
The commission added that the merger “increases the likelihood of coordination as it creates further structural linkages in the container liner market,” stressing that the proposed transaction creates a platform for coordination in the car carrier market as well.
In May 2017, the US Federal Maritime Commission (FMC) rejected on jurisdictional grounds the agreement, saying that the action “is among the type of agreements excluded from FMC review.”
The deal was so far okayed by the Competition Commission of Singapore (CCS) in March 2017.
Under the proposed deal, the joint venture would integrate the global container liner shipping activities and container terminal businesses (excluding their terminals in Japan) of NYK, MOL and K Line.
The joint venture would operate a fleet totaling 1.4 million TEUs, placing it as sixth in the market with approximately 7% of global share.
K Line and MOL, which will each hold 31 percent, and their compatriot NYK Line, which will hold the remaining 38 percent, aim to establish the new joint-venture company on July 1, 2017, while business commencement was expected to start as of April 1, 2018.
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