TUI to sell majority stake in Hapag-Lloyd  

October 14, 2008 - 0:0

FRANKFURT (WSJ)-- German conglomerate TUI AG agreed to sell a majority stake in its maritime shipping unit Hapag-Lloyd to a Hamburg-based consortium for about €2.45 billion ($3.29 billion).

TUI also said it might buy shares in UK-listed TUI Travel PLC it doesn't already own to focus on tourism.
The sale, in which the consortium also will assume roughly €2 billion in debt, keeps the world's fifth-largest container shipping company by capacity in German hands.
TUI AG rejected a competing bid by Singapore's Neptune Orient Lines Ltd. Hapag-Lloyd had €6 billion in sales last year.
The deal highlights how the credit crunch has made financing difficult. To seal the pact, Hannover-based TUI agreed to pay the consortium €700 million and will retain a 33.33% stake.
TUI had tried to sell all of Hapag-Lloyd after putting it on the auction block earlier this year.
The German company made a push into tourism last year when it agreed to take over UK-based First Choice Holiday PLC, merging it into TUI Travel to forge Europe's largest travel group with nearly €20 billion in annual revenue.
TUI, which currently has a 51% stake in TUI Travel, said Sunday it will explore using the Hapag-Lloyd sale proceeds to buy the remainder of the tourism unit.
TUI acquired Canada's CP Ships Ltd. in 2005 to become a leading maritime shipping company. But the company's sagging stock price triggered divestment demands from increasingly restive shareholders. Management agreed in March to explore a Hapag-Lloyd sale.