MSC Completes Investment in Hamburg Container Terminal Operator HHLA

MSC completed its investment in Hamburg's terminal operator HHLA (file photo)

Published Nov 29, 2024 5:41 PM by The Maritime Executive

 

 

Fourteen months after proposing its investment in the Port of Hamburg’s Hamburger Hafen und Logistik Aktiengesellschaft (HHLA) and despite political and labor opposition, MSC Mediterranean Shipping Company completed the transaction yesterday, November 28. The new joint venture was completed with the City of Hamburg holding just over 50 percent and control while MSC’s subsidiary now holds a 49 percent interest and has an agreement with the City on the operation of the port.

“Together with MSC, we want to lead HHLA into the future and develop it further,” said Hamburg’s Senator Dr Melanie Leonhard, Minister of Economy and Innovation. “Germany's largest seaport will benefit significantly from the investments in infrastructure and improvements in automation and digitalization at HHLA's terminals.”

MSC acquired shares in the financial markets reporting in December 2023 that it owned approximately 22 percent of HHLA. It agreed to pay a further €233 million ($258 million) to acquire shares reaching the 49 percent level with the City continuing to have ownership control through preferred shares and an overall 51 percent stake. MSC also obtained a 40-year contract for the joint management of HHLA.

The investment comes as Hamburg has faced increased competition from other European ports and has been impacted both by the war in Ukraine and the disruptions to container operations from the Red Sea disruption. HHLA has been seeking to build its inland operations to strengthen its position but also faces challenges in addressing the introduction of new technologies and the increasing regulations for decarbonization. 

“We want to play our part in pushing the gateway to the world further open – for the benefit of HHLA, the workforce, the people of Hamburg, and everyone else connected to this historic port,” said Søren Toft, CEO of MSC Mediterranean Shipping Company. “We will deliver on our side of the agreement. Together with the City, we will invest in growth, technology, and infrastructure to strengthen HHLA’s competitiveness. We will bring cargo to Hamburg, and we will fully protect the rights of the workforce.”

Germany’s powerful labor unions opposed the acquisition citing the potential for job losses and the loss of control of the historic port. The City of Hamburg and the MSC Group offered far-reaching commitments to HHLA’s employees that they said would safeguard workers’ rights and keep the HHLA terminals attractive for all market participants.

The City of Hamburg and the MSC Group agreed to provide €450 million in equity to support the necessary investments in HHLA. In addition, MSC committed to significantly increasing cargo throughput at HHLA’s terminals to a minimum volume of 1 million TEU per year from 2031. In addition, MSC Group has also announced that it will build its new German headquarters in Hamburg’s HafenCity with plans to employ approximately 700 people. Construction is scheduled to begin in 2026.

The City of Hamburg and MSC emphasize that they are committed to driving forward the strategic development of HHLA and the Port of Hamburg. In the next step, the City of Hamburg, HHLA, and MSC will jointly finalize the medium-term business and investment plans for HHLA in order to promote its long-term competitiveness.