Shippers hit Chinese iceberg: MOFCOM blocks JV outright
Møller-Maersk A/S, MSC Mediterranean Shipping Company SA and CMA-CGM SA have abandoned plans to enter into a long-term operational vessel-sharing agreement of about 250 cargo ships, servicing worldwide container liner shipping routes.
According to a Maersk statement, the decision came on 17 June 2014, causing the partners to abandon the deal scheduled for completion this fall. The agency has also given the parties the right to appeal the decision, but that seems unlikely at this stage.
MOFCOM suprises yet again
The blocking decision – only the second outright refusal after MOFCOM’s 2009 derailment of a Coca-Cola transaction involving a Chinese drinks manufacturer – is yet another example in the ongoing antitrust saga of Chinese unpredictability.
After obtaining clearance from the EU’s DG COMP earlier in June and likewise from the United States Federal Maritime Commission in March 2014, the three shipping giants apparently perceived a greater chance of their alliance being approved by regulators worldwide. Yet, the MOFCOM ruling has put a full halt to the joint venture:
“The decision does come as a surprise to us, of course, as the partners have worked hard to address all the regulators’ concerns,” according to the CEO of Maersk Nils Andersen.
MOFCOM, one of China’s three antitrust enforcement bodies, is said to have concluded that the proposed JV would have enhanced the market power of the P3 members and increased barriers to entry.
Maersk states disappointment
“In Maersk Line we have worked hard to address the Chinese questions and concerns. So of course it is a disappointment. P3 would have provided Maersk Line with a more efficient network and our customers with a better product. We are committed to continuing to be cost competitive and offer reliable services,” says Vincent Clerc, Chief Trade and Marketing Officer of Maersk Line.