Three-party international shipping joint venture gets the local nod
This comes after the Competition Commission had originally prohibited a merger on the basis that the transaction would have likely strengthened co-ordination in the market for the transportation of cars, containers and bulk shipping services.
The three companies intend to merge their container-liner shipping businesses. They will share ownership in a joint venture known as Ocean Network Express (ONE) and its South African subsidiary, SA JV Co.
NYK currently operates its shipping company in SA through Mitchell Cotts Maritime, while MOL operates in the country through its wholly owned subsidiaries MOL SA and MOL ACE SA. K Line operates through a controlled entity, K Line Shipping SA.
The firms' activities include the provision of various types of shipping services, including container-liner shipping, car-carrier shipping and bulk shipping, terminal services, logistics services and cruises.
After the transaction, the firms will continue to compete in car-carrier shipping and the provision of bulk shipping solutions.
Conditions approved by the tribunal address concerns pertaining to the exchange of competitively sensitive information and cross-directorships in the adjacent car-carrier shipping and bulk shipping businesses between the parties.
Broadly, the conditions prohibit a cross-pollination of employees and executives between the container-liner JV and adjacent businesses, as well as the imposition of a number of extensive monitoring and reporting mechanisms.
Executive and non-executive directors who are on the board of directors of ONE or SA JV Co shall not be involved in the day-to-day operations of the car-carrier and bulk shipping company.
Source: I-Net Bridge
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