Unfolding the fit

Two of the world’s major shipping companies look set to join forces later this year as Maersk Line is expected to acquire Hamburg Süd in a EUR 3.7 billion deal. Arnt Vespermann (left), Member of the Executive Board and future CEO of Hamburg Süd, and Søren Toft, COO of Maersk Line, share their views on the strategic and cultural fit, the potential and what to expect from the integration.

Unfolding the fit
Photos: Christina Bode

Arne Vespermann

 

Arnt Vespermann, Member of the Executive Board and future CEO, Hamburg Süd

How would you characterise Hamburg Süd as a company?

“We’re a quality carrier trading worldwide, but with a focus on North-South activities. As we’re fully family-owned, we have a personal top-down approach throughout the company. We have a high level of transparency and open dialogues between colleagues and with our customers. The latter describe us as a stable, reliable and service-focused partner, and we believe that our entrepreneurial spirit is higher than in many other companies.”

What excites you the most about joining Maersk Line?

“Becoming part of the world’s number one shipping company will create a lot of opportunities. We can expand Hamburg Süd’s scope to the global playing field and grow our market share together, while keeping our focus on North-South trades. Maersk is an extremely professional organisation. It has a bigger, wider network. Here’s a chance to develop a long-term perspective at very good cost levels within a great company.”

How do you see the cultural fit between the two companies?

“I think the cultures are quite similar. We both have a very Northern European way of doing business, meaning we are very professional, open and transparent. We make our decisions very clearly and we stick to them. We’re reliable and there’s no back-trailing mentality. The way we serve our customers is also the way we negotiated this transaction. We came to an agreement quite smoothly and that’s a testament to the cultural fit.” 

What separates Hamburg Süd from Maersk Line?

“We’re different in our approach to customers. Maersk’s service centre approach is very efficient, and I’m convinced that you can’t be number one without it. However, some customers still prefer a more individualised, personal service approach and they might choose Hamburg Süd. This doesn’t mean that one approach is better or worse, they’re just different. To some extent, we operate in different customer segments and being able to continue and expand this on more attractive terms is very important to us.”

How should employees approach the integration?

“We need flexibility from everyone, especially from our employees. They should be open to change. Many employees have been with us for a long time and we have so far only taken over companies. Many procedures might change. We might have to learn new ways of making decisions and cooperating. This takes more flexibility and openness.

Maersk is doing a great job in preparing this integration and giving our team the feeling that we’re having discussions between equals, not between winners and losers. This is very important to become one, joint team. Decisions must be made and we don’t like all of them. But decisions are made on good terms.”

Ten years from now, how do you picture the Hamburg Süd brand and your global position with Maersk?

“I want to double the transport volume for Hamburg Süd. I know it’s extremely ambitious, but you need an ambitious target. Not at the cost of Maersk, of course. We will expand the Hamburg Süd customer base, be globally active and grow together with Maersk. We want to deliver our part to Maersk’s future success.”

Soren Toft

What you need to know

  • Maersk Line will acquire Hamburg Süd for EUR 3.7 billion on a cash and debt-free basis.
  • The proposed transaction is subject to regulatory approvals with expected closing of the deal in the fourth quarter of 2017.
  • The preparation is handled by a designated integration planning team. The team consists of both Hamburg Süd and Maersk Line employees working in different work streams across operational, commercial and corporate functions, including a clean team to handle commercially sensitive information.

Søren Toft, COO of Maersk Line

Why has Maersk Line decided to buy Hamburg Süd?

“First of all, it’s a very well-run business. Hamburg Süd is known for delivering a high-quality product and Maersk can learn a lot from their way of working. For several years, we have been challenged by a fragmented market and with the acquisition of Hamburg Süd, we can generate significant cost savings and offer better products to our customers.”

What will Maersk Line and Hamburg Süd be able to achieve together that they can’t do on their own?

“By combining our networks, customers will experience even better coverage with more options. We can leverage scale to bring down operational costs and increase volumes in APM Terminals. Today, Hamburg Süd has a revenue around USD 6 billion. We want it to become a 10-billion-dollar company. However, we won’t reap any of these benefits unless we keep a constant focus on our existing customers throughout the integration process.

”What do the two companies have in common?

“Both have a long and proud heritage as family-owned companies that have spread their activities across several industries. While we’re international by heart, we both come from Northern Europe and the cultures in Northern Germany and Denmark are very similar. The people I’ve met so far are extremely professional, competent, experienced and pragmatic. Quality and orderliness have shaped the way we do business and how we both approach colleagues, customers and stakeholders. We keep our promises.”

Where are the biggest differences?

“Commercially, we want to keep separate setups as we offer different value propositions. With its worldwide presence, Maersk Line has developed and refined global standards and processes over many years. Hamburg Süd has a more regional focus and is particularly strong in Latin America and Oceania. Therefore, they offer customers a deep understanding of local conditions and we want to protect and nurture this unique brand position.”

So some differences can be turned into commercial advantages. Where do you see the biggest challenges in this integration?

“We’re all humans. Much of Hamburg Süd’s growth and success have been achieved through acquisitions. Now it’s the other way around and that takes a lot of adaptability – rationally and emotionally. Everyone must realise how great we can become together and for Hamburg Süd employees, this means joining a global workplace with more opportunities.”

What does the integration demand of employees?

“Courage. Especially from employees in Hamburg Süd. You must be able to cope with the changes and consequences of getting a new owner. The big difference is that we’re committed to the future of this industry. For Maersk employees, the successful integration depends on our ability as leaders and employees to be open, transparent, approachable and respectful to our new colleagues and their situation. If we manage that, our common journey will be much smoother and we’ll have plenty to be excited about.”

Hamburg Sud

Looking back to 1913 – with Hamburg Süd

Hamburg Süd has been a partner for Maersk for more than 100 years. The steamer LAURA MÆRSK joined the Maersk fleet in January 1913 and her first voyage was on a time charter for the Hamburg-Südamerikanische Dampfschifffahrts-Gesellschaft. The voyage started in Hamburg and LAURA MÆRSK made several port calls in Brazil and Argentina before returning to Europe – this was the first time a Maersk vessel called South America.