The Executive and Supervisory boards of HHLA Hamburg have greenlit MSC’s offer to buy 49,9 per cent of the company’s stakes. Negotiations, including the two parties and the City of Hamburg, deemed the offering adequate. The HHLA boards now recommend that the company’s shareholders accept the offer, which, according to official and binding agreements, will not disrupt HHLA’s business model and will secure several aspects of the business concerning investments, subsidiaries and employees.
The Executive and Supervisory boards of HLA Hamburg were obliged by the German Securities Acquisition and Takeover Act (WpÜG) to “examine the offer carefully, impartially and in the best interests of all the company’s stakeholders” and subsequently proceed to a joined ‘Reasoned Statement’ explaining why the takeover should take place or not.
The offer’s assessment was mainly based on the financial aspect of the transaction, which the HHLA Hamburg boards considered financially adequate and competitive. Specifically, HHLA explained that they are content with MSC’s offer to pay 16,75 euros per Class A share. However, what could be even more critical in accepting this offer is the Business Combination Agreement (BCA) signed by HHLA, MSC and the City of Hamburg, which safeguards HHLA’s future business in different ways.
The Business Combination Agreement
Just days after the announcement of MSC’s intention to acquire 49,9 per cent of HHLA’s shares, protests broke out in Hamburg, with labour unions claiming that the port of Hamburg is not for sale and should remain in public hands. The regime in which the port of Hamburg is subjected, considering that it is a public entity, makes share acquisition a more complex process, igniting fears over operational and business changes that could harm both the city of Hamburg and the port employees.
In this regard, the BCA agreement reached by the three parties involved in the acquisition process could provide some security and assurance for the following steps. First and foremost, one of the BCA’s commitments concerns the HHLA’s workforce. According to the company, the employees should not be alerted of possible redundancies since the BCA excludes reducing personnel due to operational reasons for at least five years. However, it is not binding that this commitment will continue to be applied after this timeframe passes.
Additionally, HHLA will maintain its neutrality and independence, especially regarding its subsidiaries like railway operator METRANS and will continue pursuing its investment planning in relation to port terminal modernisation, for instance. HHLA said that the City of Hamburg and MSC will support the implementation of such plans with an additional financial injection of 775 million euros between 2025 and 2028.
Moreover, HHLA will receive an additional 450 million euros from the other two parties in the years following the acquisition deal in equity capital to continue investing in business operations. Finally, HHLA assured that all business conducted within, to and from the port after the acquisition will follow the same model as now, making the port of Hamburg the centre of development for sea-borne container traffic and intermodal expansion via METRANS.