Maersk Line is to acquire Hamburg Süd by the end of 2017, according to an agreement between Maersk and the Oetker Group, parent company of the German shipping line.

“Today is a new milestone in Maersk Line’s history,” said Søren Skou, CEO of Maersk Line and the Maersk Group. “I am very pleased that we have reached an agreement with the Oetker Group to acquire Hamburg Süd. Hamburg Süd is a very well-run and highly respected company with strong brands, dedicated employees and loyal customers. Hamburg Süd complements Maersk Line and together we can offer our customers the best of two worlds, first of all in the North-South trades.”

Hamburg Süd is currently the seventh-largest container shipping line, operating 130 container vessels with a combined capacity of approximately 625,000 TEUs.

“We are proud to join the global market leader Maersk Line,” said Ottmar Gast, chairman of the executive board at the Hamburg Süd Group. “While gaining access to a superior network and systems we will continue the Hamburg Süd brand and business model offering personalized solutions to our shippers and consignees. By joining forces both Maersk and Hamburg Süd will strengthen their product portfolio and cost position to the benefit of their customers.”

August Oetker, chairman of the advisory board of Dr. August Oetker KG, the management holding company of the Oetker Group, said that giving up the shipping line after an 80-year ownership was not an easy decision.

“We are very confident, though, to have chosen the best of all possible partners,” he said. “Maersk will preserve and grow Hamburg Süd and what the brand and the whole organization and a highly dedicated workforce stand for: reliable and high-quality logistical services to our customers.”

According to Maersk, the acquisition will result in a combined fleet of 741 vessels with a total container capacity of around 3.8 million TEUs. Market share will increase to 18.6%.

“Our combined network will provide exciting opportunities to develop new products and exploit operational synergies,” Skou said. “Hamburg Süd and Maersk Line customers will benefit from more choice and better products.”

He added that the transaction is in line with Maersk’s strategy to grow market share organically and through acquisitions.

The deal is subject to due diligence, final agreement and regulatory approval in jurisdictions such as Australia, Brazil, China, the EU, Korea and the United States. This will last until the end of 2017.

Further details will be given after the approval of the sales and purchase agreement, which is expected to take place in the second quarter of 2017, according to Maersk.