CP SHIPS ACQUIRES ITALIA, RETURNS TO ACQUISITION TRAIL
London-based CP Ships has returned to the acquisition trail after a pause of two years by taking over Italian container shipping company Italia di Navigazione.
CP Ships announced today (Thursday) that it has reached agreement with d’Amico Societa di Navigazione S.p.A., the parent company of Italia, to acquire all issued and outstanding shares of the Italian shipping line for $40 million in cash.
The takeover of the Italian transatlantic carrier is CP Ships’ first since it became an independent public company last fall. Last November, CP Ships announced an agreement to acquire Nordana Line, a small Danish niche carrier, but the transaction fell through.
CP Ships said that the acquisition of Italia is subject to regulatory approval and certain other closing conditions, and is expected to close in the third quarter. Italia will remain headquartered in Genoa, Italy. CP Ships said that Italia will retain its Genoa headquarters and staff, including employment guarantees given by d’Amico to the Italian government
Formerly owned by the Italian government, Italia was privatized in 1998, when it acquired by d’Amico.
Italia operates its principal container services between the Mediterranean, West Coast of North America and Central and South America. It carried about 180,000 TEUs in 2001.
The takeover should reinforce the CP Ships group’s already substantial presence in the transatlantic trade, and its activities in Central and South America. Italia recently terminated its Mediterranean/U.S. East Coast service, blaming non-compensatory freight rates, but continued its Mediterranean/West Coast of North America service.
Italia will become the sixth transatlantic shipping line controlled by CP Ships, alongside Canada Maritime, Cast, Contship Containerlines, Lykes Lines and TMM Lines.
“The purchase of Italia is the continuation of a key element of CP Ships’ overall strategy of making acquisitions to strengthen our regional position, create new opportunities for growth and build trade lane economies of scale,” said Ray Miles, chief executive officer of CP Ships.
“It has been a decision that we have made to guarantee the future of the company,” said Cesare d’Amico, a senior executive of d’Amico. He said that his company will, following the sale of d’Amico, concentrate on its bulk and product carrier shipping activities, in which it is investing heavily. D’Amico will also focus on expanding its intra-Mediterranean feeder services and on entry into the short-sea trades.
The acquisition of d’Amico by CP Ships includes its brand and logo; its services in four container shipping trade lanes; the charter of 11 containerships with capacity between 1,000 and 2,500 TEUs; a mainly leased container fleet of about 40,000 TEUs; the Genoa headquarters and staff; and owned agency operations in Italy, Spain, Canada and Venezuela.
“The strong Italia brand will complement CP Ships’ existing brand strategy,” said Frank Halliwell, chief operating officer. CP Ships, which has built its reputation by acquiring and turning around a string of regional carriers, is the parent company of ANZDL, Canada Maritime, Cast, Contship Containerlines, Lykes Lines and TMM Lines. Its fleet of 78 ships carries nearly two million TEUs a year.