On 29 June 2017 the European Commission unconditionally approved under the EU Merger Regulation the proposed creation of a joint venture (JV) between three Japanese shipping carriers – Nippon Yusen Kabushiki Kaisha, Mitsui O.S.K. Lines and Kawasaki Kisen Kaisha Ltd – active in the field of international maritime transport. The Ocean Network Express (ONE) JV will integrate the global container liner shipping activities and container terminal businesses of its parent companies (excluding their terminals in Japan) so as to create the world’s sixth-largest container line.
The Commission concluded that the proposed concentration raised no competition concerns as: (i) the transaction would have limited impact on the routes to and from Europe, and (ii) there would continue to be effective alternative competitors present on the market post-transaction. This decision comes one week after South Africa’s Competition Commission blocked the JV on grounds that the shipping market is structured in a manner “conducive to coordination”. Other competition authorities, including those of Brazil, Singapore and China, have recently approved the proposed JV.
The proposed JV comes at a time of increasing market consolidation in the shipping liner industry that has attracted global antitrust scrutiny. In the last year, the European Commission has approved with conditions Maersk Line’s acquisition of Hamburg Sud and the purchase of United Arab Shipping Company by Hapag-Lloyd. In addition, the industry is under probe by various competition authorities worldwide. Last month, the Mexican competition authority Cofece imposed a fine of 582 million pesos (c. €28.5 million) on seven shipping companies (including the JV parents) for agreeing to divide the market for maritime transportation of motor vehicles.