Hapag-Lloyd A Great Fit For NOL

Implications: As other likely strategic buyers seem to be backing away, NOL is emerging as the leading bidder for TUI's Hapag-Lloyd.

Analysis: Whether it is the all-too-recent memory of poor integrations by Maersk and Hapag-Lloyd or the current market, very few of the top container shipping companies appear to be showing an interest in acquiring Hapag-Lloyd.  This leaves NOL, which has be rumored to be in negotiations for months, as the leading candidate.

CMA-CGM and MSC have been very aggressive in this market in acquiring market share abandoned by Maersk, and it is surprising that neither seem interested in the boost that Hapag-Lloyd would bring.  Maersk is in the middle of a well-publicized retrenchment designed to return the company to acceptable profit levels.

NOL, with its heavy emphasis on the transpacific trade lane, would have the most synergies from this acquisition.  Hapag-Lloyd is very strong in the transatlantic, and the combined assets in the Asia-Europe trade lane would be complementary.Finally, a lack of interested parties will likely keep the acquisition price to a reasonable premium. 

Combined, NOL would overtake Evergreen for the number 3 spot in worldwide trade, at least in terms of owned capacity.  As one of the few companies able to turn very good profit in a difficult market, NOL may be better positioned to avoid the integration issues faced during the last mega-mergers.