Maersk Broker and Lightship Chartering have reached an agreement to combine the two companies' dry bulk chartering activities in a new company under the name LMB Bulk Chartering (LMB), say the two companies in a statement.
In late November, Maersk Broker CEO Anders Hald told ShippingWatch that Maersk Broker, like several other major international brokerage firms, was looking into potential merger prospects. And now the company has reached an agreement.
"We are entering this agreement because we had an opportunity to merge with a strong partner in a join venture with a strong presence in markets where we ourselves do not have a solid presence, namely Asia and the East in general," Morten Have, Chairman and partner at Lightship Chartering, tells ShippingWatch.
Maersk Broker and Lightship Chartering say the following in the statement:
"This new venture will capitalise on the strong reputation both Maersk Broker and Lightship have developed over the years as leading providers of dry cargo chartering services. LMB will be able to offer our customers an enhanced range of skills and support in all segments of the Dry Bulk market," adding:
"LMB will combine the key strength from Lightship within spot chartering with the period/project focus of Maersk Broker through a global network of offices – also taking advantage of the focus Lightship have in the Atlantic market and the strong Asian presence of Maersk Broker."
Morten Have and Claes Devantier will serve as joint CEOs of the new company. Frank K. Mortensen will serve as COO/CFO.
LMB Bulk Chartering's board of directors will consist of Morten Have as Chairman plus Frank K. Mortensen and Thomas B. Stahl of Lightship, and Anders Hald, Claes Devantier and Henrik Franck from Maersk Broker.
Negotiating for six months
Morten Have explains that the collaboration negotiations between Maersk Broker and Lightship Chartering began in the second quarter this year. The negotiations continued while other brokers, including major player Clarkson and Platou, were merging.
"We were established in 1975 and - expect for that first year - we've turned a profit every year, so our joint venture is not the result of a necessity. But we've found a partner that has the same visions and strategies in a world that develops every day. We've realized that we have to be present close to our core customers, and this means being represented in more places around the world," says Morten Have.
LMB Bulk Chartering will have 12 offices around the world with 80 employees. Half of these will come from Lightship Chartering and the other half from Maersk Broker.
Maersk Broker: Clearly increased competition
Lightship Chartering cannot at this point comment on what impact the move will have on the company's bottom line, but the company does expect that it will make a big difference in a broker market characterized by mergers.
Competition from the new merged companies raises the bar for what brokerage firms can offer, Maersk Broker CEO Anders Hald told ShippingWatch a few weeks ago.
"The recent mergers are so new that we have yet to see the results of what they'll be able to do. This will naturally bring increased competition, and seeing as we're part of the market we'll likely be seeing some changes pretty soon. This also means that we need to be even more focused on expanding our customer base," said Anders Hald.
Maersk Broker's 2013 revenue came to USD 58.2 million, compared to USD 76.7 million in 2012 - a decline that was also reflected in the profit, which finished at USD 2.98 million in 2013, down from USD 17.2 million in 2012. This development is attributed to the fact that the financial crisis hit the company hard in this period. The company expects an improved result for 2014.
Lightship Chartering achieved a profit in 2013 in spite of a struggling dry bulk market. The company's 2013 revenue came to USD 11.1 million, an improvement from USD 10.2 million the year before. The 2013 operating profit was USD 1.6 million, up from USD 636,400 in 2012.
Lightship's management described this result as highly satisfatory.