Hapag Lloyd

German company TUI came to a decision on Sunday to sell its container shipping unit Hapag-Lloyd, the world’s fifth largest, to a consortium of Hamburg-based investors for 4.45bn euros (US$5.96bn).

The winning bidders beat out Singapore’s Neptune Orient Lines (NOL), which announced on Friday it would drop its bid to focus on the company’s existing APL container business.

Hapag-Lloyd, its debt and its 130 ships will be purchased by the Hamburg consortium under a subsidiary company, and reformed as Albert Ballin GmbH & Co KG. As part of the deal, TUI will buy one third of the new company for 700m euros (US$938m), according to the Journal of Commerce.

The Hamburg consortium is led by Klaus-Michael Kuehne, the majority investor in Swiss logistics group Kuehne & Nagel, the City of Hamburg and bank MM Warburg partner Christian Olearius.

Norwegian shipping baron John Frederiksen, a substantial stake owner in TUI, said last week the company should wait to sell Hapag-Lloyd until the current economic turmoil has passed.

“Despite an adverse environment, the price we have achieved for container shipping reflects its fair value even under normal market conditions,” said TUI chief executive Michael Frenzel.

“Selling only two thirds of Hapag-Lloyd has made this price possible. In addition, our entrepreneurial stake will offer us the opportunity to benefit from the future earnings potential,” he said.

The sale of the shipping unit still needs anti-trust regulatory approval before the deal can be finalised.