EU approves creation of Japanese joint venture

The European Commission has approved, under the EU Merger Regulation, the creation of a joint venture between the three Japanese shipping companies, Nippon Yusen Kabushiki Kaisha Ltd. (NYK), Mitsui O.S.K. Lines, Ltd. (MOL) and Kawasaki Kisen Kaisha Ltd. (K Line).

The joint venture will integrate the global container liner shipping activities and container terminal businesses (excluding their terminals in Japan) of NYK, MOL and 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”, explained EU Commission in an official statement.

While Singapore has also recently approved the cooperation, South African Competition Commission and the US Federal Maritime Commission (FMC) rejected it.

“The Commission has 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 merger increases the likelihood of coordination as it creates further structural linkages in the container liner market”, South African Competition Commission said.

Under the agreement, the three companies will establish a new joint-venture company to integrate the container shipping businesses (including worldwide terminal operating businesses excluding Japan) of all three companies and to sign a business integration contract and a shareholders agreement.

“By strengthening the global organization and enhancing the liner network, the new joint-venture company aims to provide higher quality and more competitive services”, MOL noted.