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2016/10/31/(Mon)

Notice of Agreement to the Integration of Container Shipping Businesses [Shipping Line]

Kawasaki Kisen Kaisha, Ltd., Mitsui O.S.K. Lines Ltd., and Nippon Yusen Kabushiki Kaisha have
agreed, after the resolution by the board of directors of each company held today, and subject to
regulatory approval from the authorities, to establish a new joint-venture company to integrate
the container shipping businesses (including worldwide terminal operating businesses excluding
Japan) of all three companies and to sign a business integration contract and a shareholders
agreement.
1. Background
Although growing modestly, the container shipping industry has struggled in recent years due to
a decline in the container growth rate and the rapid influx of newly built vessels. These two
factors have contributed to an imbalance of supply and demand which has destabilized the
industry and has created an environment that is adverse to container line profitability. In order to
combat these factors, industry participants have sought to gain scale merit through mergers and
acquisitions and consequently the structure of the industry is changing through consolidation.
Under these circumstances, three companies have now decided to integrate their respective
container shipping on an equal footing to ensure future stable, efficient and competitive business
operations.
The new joint-venture company is expected to create a synergy effect by utilizing the best
practices of the three companies. And by taking advantage of scale merit of its vessel fleet
totaling 1.4 million TEUs, realize integration effect of approximately 110 billion Japanese Yen
annually and seek swiftly financial performance stabilization.
By strengthening the global organization and enhancing the liner network, the new joint-venture
company aims to provide higher quality and more competitive services in order to exceed our
clients’ expectations.

2. Overview of the new joint-venture company
Item Outline
Shareholders/
Contribution Ratio
Kawasaki Kisen Kaisha, Ltd. 31%
Mitsui O.S.K. Lines, Ltd. 31%
Nippon Yusen Kabushiki Kaisha 38%
Amount of
Contribution
Approx. 300 Billion JPY
(Including fleets, share of terminals as investment in kind)
Business Domain Container Shipping Business
(Including terminal operating business excluding Japan)
Fleet Size Approx. 1.4 Million TEU*, 6th in the market with approx. 7% of global
share
Notes1) Figures are as of October, 2016 excluding order book
Notes2) Source: Alphaliner
*TEU: Twenty-foot Equivalent Unit

3. Schedule
Agreement date: October 31st, 2016
Establishment of the new joint-venture company: July 1st, 2017 (planned)
Business commencement: April 1st, 2018 (planned)

Posted at 17:19

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