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Sunday, June 14, 2009

EU Probes Acquisition of Short Sea Carrier

Sunday, 14 June 2009

European Union anti-trust regulators on June 12 opened an in-depth investigation of plans by DSV, Scandinavia's biggest trucker, and Danish shipping line Vesterhavet, to take joint control of Copenhagen-based DFDS, a leading European short sea shipping line. The European Commission, the EU's executive agency, said its initial market investigation indicated that the proposed deal could significantly impede competition in the European short sea shipping sector.
"We must ensure that freight forwarders will continue to have access to transport on ro-ro vessels, so that final customers will not suffer price increases," the EU's competition commissioner Nellie Kroes said in a statement.
The Commission said it fears the takeover would have a potential adverse impact on other freight forwarders in terms of freight rates and access to some roll-on, roll-off shipping routes.
Commitments offered by DSV and Vesterhavet to address competition concerns during the preliminary investigation proved insufficient, the Commission said.
DSV, which has a 45 percent stake in the company planning to take control of DFDS, is the biggest customer of the carrier's ro-ro shipping services in the North Sea and the Baltic Sea. It also acquired DFDS's trucking business in 2000.
The bid for DFDS follows DSV's $1 billion acquisition of Belgium's ABX Logistics in 2008 that created Europe's third largest truck-rail transport group with annual revenue of $4.2 billion. DSV expects to handle around 850,000 twenty-foot containers and 215,000 tonnes of air freight in 2009.
DFDS revealed last month it is among several companies negotiating the potential acquisition of Norfolkline, the 18-ship short sea unit of A.P. Moller-Maersk, the Danish parent of ocean container carrier Maersk Line.
The Commission said it has 90 working days to make a final ruling, and stressed that the decision to open an in-depth investigation does not prejudge the result of its probe.

Source: Journal of Commerce