Hyundai and Hanjin Deny Merger Talk
While merger talks between South Korean shipping companies Hanjin and Hyundai Merchant Marine lines hit the newspapers, the latter has refuted rumors that the government asked the carrier to merge with the former.
HMM said, "With regards to the report in Korea Economic News, the company has not received any such request from the government."
The two companies’ container divisions had since 2009 suffered cumulative losses of $700m and $500m respectively.
Industry analyst Alphaliner said that both Hanjin and its compatriot Hyundai Merchant Marine are stuck in this “container trap” at a time of severe market competition where neither carrier has the financial resources to order the latest generation of ultra-large container vessels (ULCVs) to allow them to compete on unit costs with their peers.
Both companies are also trying to raise money by divesting interests in non-core liner assets.
Yang Chang-ho, professor of logistics at Incheon National University, warned, "Unless the nation's leading shipping companies increase their size through mergers with each other, they will face a much more serious challenge within a few years when larger vessels would be put in service."
