Cargo containers. Picture: THINKSTOCK
Cargo containers. Picture: THINKSTOCK

The Competition Tribunal has conditionally approved a joint venture of three international shipping companies: Nippon Yusen Kabushiki Kaisha (NYK), Mitsui OSK Lines (MOL) and Kawasaki Kisen Kaisha (KL).

The three intend to merge their container liner shipping businesses. They will share ownership in the joint venture known as Ocean Network Express (ONE) and its South African subsidiary SA JV.

The conditional approval comes after the Competition Commission originally prohibited a merger on the basis that the transaction would probably have strengthened co-ordination in the market for the transportation of cars, containers and bulk shipping services.

Before the transaction, NYK operates its shipping company in SA through Michael Cotts Maritime, while MOL operates in the country through its wholly owned subsidiary MOL SA and MOL ACE SA. KL operates through a controlled entity, K Line Shipping SA. Activities of the firms include the provision of container liner shipping, car carrier shipping and bulk shipping, terminal services, logistics services and cruises. After the transaction, they 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. The conditions prohibit a cross-pollination of employees and executives between the container liner JV and adjacent businesses.

Executive and nonexecutive directors, management, representatives and employees of ONE and SA JV — including those who are seconded from the parties or who have left employment of the parties and will be employed by ONE and/or SA JV Co — shall not receive any confidential information regarding the car carrier and bulk shipping business from any party.

Executive and nonexecutive directors who are on the board of ONE and/or SA JV shall not be involved in the day-to-day operations of the car carrier and bulk shipping company.

allixm@bdfm.co.za

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