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.

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

4. Other
The expected impact of the integration to business performance will be informed by each individual company once details have been confirmed.

Inquiries
Please contact following person for this notice.
Kawasaki Kisen Kaisha, Ltd.
Kiyoshi Tokonami, General Manager, Investor & Public
Relations Group
(TEL: +81-3- 3595-5189)

Mitsui O.S.K. Lines, Ltd.
Kayo Ichikawa, General Manager, Public Relations Office
(TEL: +81-3- 3587-7015)

Nippon Yusen Kabushiki Kaisha
Ushio Koiso, General Manager, Corporate Communication
and CSR Group
(TEL: +81-3-3284-5058)

This document includes information that constitutes “forward-looking statements” relating to the success and failure or the results of the integration of Kawasaki Kisen Kaisha Ltd., Mitsui O.S.K. Lines Ltd., and Nippon Yusen Kabushiki Kaisha. To the extent that statements in this document do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the three companies in light of the information currently available to them, and involve known or unknown risks, uncertainties and other factors. Such factors may cause the actual results to be materially different from the contents of this document with respect to any future performance, achievements or financial position of one or all of the three companies (or the new company after the integration) expressed or implied by these forward-looking statements. Further, the three
companies undertake no obligation to publicly update any forward-looking statements after the date of this document.

The risks, uncertainties and other factors referred to above include, but are not limited to:
(1) Procedural and practical difficulties accompanying implementation of the integration;
(2) Changes in supply and demand for the market, and changes in market position including changes in the competition
environment and relationship with major customers;
(3) Changes in economic conditions in and outside Japan and changes in exchange rates;
(4) Possibility of misappropriation or deletion of personal data or confidential information due to IT failure, cyber-attack, or
other reason;
(5) Occurrence of natural or man-made disaster which may have an adverse effect on the employees, offices, key
facilities and IT systems of the new joint-venture company after the integration;
(6) Changes in laws and regulations relating to business activities;
(7) Delays in the review process by the relevant competition law authorities or the clearance of the relevant competition
law authorities or other necessary approvals in relation to the integration being unable to be obtained; and
(8) Difficulty accompanying materialization of synergies or integration effects in the new joint-venture company after the
integration.

Source: MOL
2016-10-31

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