A.P. Moeller-Maersk AS has announced that it is offering a commitment to withdraw Royal P&O Nedlloyd from some of the conferences and consortia of which P&O Nedlloyd is a member, should European Union antitrust authorities request such a withdrawal as a condition for approving the proposed acquisition.
The offer to withdraw is related only to some of the conferences and consortia involving Europe where Royal P&O Nedlloyd is represented and where Maersk Sealand is not currently a member. Antitrust approval of the proposed merger has been questioned by some industry analysts, since a combined Maersk-P&O operation would control 18% of the global market. The combined company would be twice as large as its next largest competitor, Mediterranean Shipping. Media reports have indicated that Maersk’s offer would remove P&O Nedlloyd from over ten alliances, the most significant being the Grand Alliance.
In announcing its proposed offer, Maersk stated: To minimize any period of uncertainty for our customers and other stakeholders and to comply with the regulatory demands, we intend to withdraw from the conferences and consortia in question as quickly as possible within our legal obligations. In effect this means giving notices of resignations from these arrangements once the transaction has closed, with termination taking effect after having complied with the notice periods in each of the agreements. There are no present plans to make any changes to the conferences and consortia where Maersk Sealand and Royal P&O Nedlloyd are already both members, but it cannot be ruled out that further remedies will be demanded by the authorities.
The proposed withdrawal of P&O from some of its existing conferences and consortia as a condition for merger approval is another sign that the days of the liner shipping antitrust exemption will soon be coming to an end. The European Competition Commission is continuing its review of the exemption, with all signs pointing to a significant curtailment or outright elimination of the carrier industry’s antitrust exemption. The voluntary withdrawal of P&O as a stand-alone member of conferences and consortia signals recognition by at least one major ocean common carrier that the era of antitrust immunity is in its twilight.