MSC Group's strategic participation in HHLA

HHLA has been informed by its main shareholder, the Free and Hanseatic City of Hamburg (FHH), that the latter has reached agreement with Mediterranean Shipping Company S.A. (MSC) on a strategic participation in HHLA as part of an investor agreement. Immediately after receiving the information, HHLA published a corresponding ad hoc announcement on 13 September.

According to this agreement, the City of Hamburg will remain the majority shareholder. It intends to manage the company together with MSC and thus further develop HHLA. To this end, the City of Hamburg intends to hold a 50.1% stake in the future and MSC a stake of up to 49.9%. On 23 October 2023, MSC has made a voluntary public takeover offer for all issued Class A shares in HHLA at a price of EUR 16.75 in cash per Class A share.

On 6 November 2023, the Executive Board and the Supervisory Board of HHLA published a joint Reasoned Statement pursuant to Section 27 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, WpÜG). In this statement, both boards recommend to the shareholders to accept the offer.

HHLA has reached an agreement with the City of Hamburg and MSC on a business combination agreement. This contains extensive provisions for the independent further development of HHLA.

On November 14, 2024, the last closing condition for the voluntary public takeover offer by MSC was met with merger control clearance in Ukraine (see News). This means that the offer will be executed.

The Business Combination Agreement (BCA) is based on a preliminary framework agreement dated 6 November 2023 and contains extensive provisions for the independent further development of HHLA. The commitments of the Business Combination Agreement cover the following areas in particular:

• The confirmation of the existing HHLA’s business model and existing strategy;
• the continuation of the investment program within the framework of the existing HHLA strategy until 2028 with investments of approximately € 1.2 billion, irrespective of further equity commitments from the shareholders. The decision-making authority over the investments remains with the HHLA Executive Board and Supervisory Board;
• additional equity capital totalling € 450 million;
• a long-term volume commitment from MSC for HHLA's Hamburg container terminals;
• maintaining the neutrality of HHLA's business model. All customers continue to have equal access to all HHLA terminals and services throughout Europe;
• the continuation of the existing growth strategy of HHLA's intermodal activities, including the expansion of terminals, the use of locomotives, freight wagons and e-trucks throughout Europe;
• far-reaching regulations to safeguard employees, in particular the exclusion of redundancies for operational reasons for at least five years.

With merger control clearance in Ukraine on November 14, 2024, the last condition precedent for the voluntary public takeover offer has been fulfilled. This means that all the conditions under which the takeover bid by MSC was made have been fulfilled and the transaction will be completed. Thereafter, MSC and the City of Hamburg (or its subsidiaries SAS and HGV) will deliver their respective Class A shares to Port of Hamburg Beteiligungsgesellschaft SE. The class S shares will remain in the ownership of HGV.

MSC's offer, which was published on 23 October 2023, relates to HHLA's listed A shares and thus concerns the Port Logistics subgroup with its three segments Container, Intermodal and Logistics. The offer also applies to the so-called S shares, which relate to HHLA's Real Estate segment and are not traded on the stock exchange. The Free and Hanseatic City of Hamburg (FHH), which indirectly holds all S shares, has concluded a binding agreement with MSC on the basis of which the S shares will not be sold and will therefore not become part of the strategic partnership between FHH and MSC. The Free and Hanseatic City of Hamburg will thus remain the sole owner of the S shares.

Taking into account a Fairness Opinion prepared for the Executive Board and the Supervisory Board by Citigroup and the premium on the underlying stock market prices, analysts' estimates and own assessments, the Executive Board and the Supervisory Board consider the offer price of EUR 16.75 per share to be adequate. In negotiations with the City of Hamburg and MSC, the Executive Board and the Supervisory Board also reached extended commitments for the long-term development of HHLA as part of a binding preliminary framework agreement foregoing a Business Combination Agreement. In particular, this includes an additional equity commitment by the City of Hamburg and MSC totalling EUR 450 million for investments in HHLA's business operations over the coming years. In the joint Reasoned Statement, both boards therefore recommend to the shareholders to accept the offer.

HHLA's stock exchange listing and the associated capital market obligations will remain in place until further notice. The exact conditions for a potential delisting are set out in section 16 of the offer document (“Possible consequences for HHLA shareholders who do not accept the offer”). 

The shareholding threshold of 95% required for a squeeze-out under stock corporation law has not yet been reached. Subject to the relevant shareholding threshold being reached, the City of Hamburg and MSC will have the required statutory majority of votes upon completion of the Transaction to enforce important structural measures under corporate law and other measures at HHLA's general meeting. Possible structural measures and their exact terms and conditions are described in more detail in Section 16 of the Offer Document.  

The Business Combination Agreement (BCA), which was negotiated between HHLA, the City of Hamburg and MSC, regulates some of the relevant issues for HHLA and restricts possible structural measures for a certain period of time. For example, the BCA stipulates that HHLA is to remain in the legal form of a German stock corporation with a dualistic governance structure (Executive Board and Supervisory Board) until the end of 2026. 

Pursuant to Section 16 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, WpÜG), HHLA shareholders who had not tendered their Class A shares by the end of the initial acceptance period on 20 November 2023 at 24:00 hrs (CET) were able to tender their shares until the expiry of the additional acceptance period on 7 December 2023 at 24:00 hrs (CET). After expiry of this period, shareholders who have not accepted the offer can continue to sell their shares freely on the open stock market.

The settlement of the offer and the payment to HHLA shareholders who have tendered their shares in the context of the takeover offer will be made no later than on the seventh banking day following the announcement of the bidder that all closing conditions have been fulfilled. The announcement that all closing conditions have been fulfilled was made on November 14, 2024. 

HHLA is one of the terminal operators in the Port of Hamburg. HHLA is also a leading European logistics company. With its dense network of seaport terminals in Hamburg, Odessa, Tallinn and Trieste, excellent hinterland connections for road and rail and interlinked intermodal hubs in Central and Eastern Europe, HHLA is the logistics and digital hub along the transport flows of the future.

Put in one sentence: HHLA's business starts at the waterfront, and takes place all over Europe. The business model relies on innovative technologies and is committed to sustainability.