German tour company TUI has agreed to sell its container shipping unit Hapag-Lloyd to a Hamburg-based consortium, the firm said.
Hapag-Lloyd's ownership is on the move to a Hamburg consortium
The company's supervisory board reached its decision on Sunday, Oct. 12, and said in a statement that it was selling the shipping unit for 4.45 billion euros ($6.02 billion) in order to concentrate on its tourism activities.
The business will be sold to a logistics consortium run by Klaus-Michael Kuehne, and TUI said it will purchase a third of the new consortium for 700 million euros. The German travel giant said it would use money made from the sale to pay down credit debt and to issue a special dividend to investors.
Shipping lines are currently being squeezed round the world by high fuel prices, a flattening in trade growth and sharp competition in freight rates.
Once one of the world's leading shipping nations, Germany has seen its merchant fleet shrink over the years. Hapag-Lloyd is the country's largest shipping lines and currently employs some 7,700 people with annual revenues just under 5 billion euros.
The consortium became the only remaining bidder after Singapore's Neptune Orient Lines (NOL), 66 percent owned by Singapore sovereign wealth fund Temasek Holdings, dropped out of the race to take over the shipping company.
The deal needs approval from anti-trust agencies before the sale can be completed.