TUI, the German tourism and transportation company, is drawing up plans to integrate Hapag-Lloyd, its ocean container shipping business, into its parent company.
This is a bid to thwart hostile takeover bids. The move coincides with a report that Singapore-based Neptune Orient Lines is seeking a merger with Hapag-Lloyd that would create the world's fourth-largest ocean container line.
TUI is seeking to repel unwanted takeover bids and calls for its shipping operations to be spun off, by merging Hapag-Lloyd, currently a legally independent business, with TUI AG. It would also move TUI's headquarters from Hannover to the port city of Hamburg, where Hapag-Lloyd is based.
The move would place Hapag-Lloyd, the world's fifth-largest container carrier, at the core of TUI and strengthen management's ability to prevent the break-up of the two companies, something that has long been demanded by investors seeking to squeeze more value out of the buoyant shipping operation.
TUI has long been an attraction to investors, lured by the global boom in container shipping that has swollen Hapag-Lloyd's value to around US$5.9 billion.