AP Moller – Maersk has abandoned its sale of reefer container manufacturing unit MCI to China International Marine Container (CIMC) after objections from US regulators.
In September last year the Danish company agreed to sell Maersk Container Industry (MCI) to Chinese manufacturer CIMC for $987.3 million. The deal was subject to regulatory approvals in a number of jurisdictions including the US.
“American consumers depend on the global cold supply chain for many of our everyday essentials,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division.
“CIMC’s acquisition of MCI threatened to harm this critical aspect of our economy leading to higher prices, lower quality, and less resiliency in global supply chains.”
The Department of Justice said it would have put CIMC in a dominant position in the sector.
“It would have cemented CIMC’s dominant position in an already consolidated industry and eliminated MCI as an innovative, independent competitor,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The deal also 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.”
The supply chain has been very much in focus in the US over the last two years in the COVID-19 pandemic which has resulted in severe, and US – China relations have also been stress.
Maersk said in a statement that along with CIMC it had announced the termination of the deal on Thursday due to “significant regulatory challenges” without referring to the US Department of Justice announcement.
Maersk CFO, Patrick Jany, said, “It is unfortunate that the transaction will not happen despite efforts of all parties involved. Throughout the process MCI has performed very well thanks to the dedication of all its employees. Maersk will continue to be a proud owner of MCI for the foreseeable future, and we will now assess the best structural set-up for MCI to ensure the long-term development of the business.”
Also reacting to the development, CIMC said, “Despite the efforts of both parties, the merger review is currently facing great uncertainty, both parties decided to terminate the transaction after a comprehensive and prudent assessment. The termination of the transaction will not have a material adverse impact on the group’s main business operations. In the future, the group will continue to focus on the development of its cold chain business to broaden revenue stream.”
MCI was founded in 1991 and employs 2,300 people in Denmark and China.
Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.
