Referring to BV’s recent announcement of a conditional €500m bid to acquire a majority stake in German rival Germanischer Lloyd, Mr Anne said such an alliance would be number one in ship classification in terms of numbers of vessels, order book size, and global revenue, and number three or four in terms of tonnage in class. Within ten years, the new grouping would have a 20% market share in China and 13% in Greece. A BV/GL alliance would thus have the critical mass to survive any economic downturn.

However, what was quickly seen as a hostile bid by Germanischer Lloyd, its employees, and some shareholders has caused both widespread uproar and a surge of interest from other potential bidders.

GL’s elected  works council expressed concern over the job security of its 1,400 workforce in Hamburg and another 1,600 around the world, claiming the BV offer contained no assurances regarding their future.

With most shareholders reportedly willing to sell, BV’s opening bid started an auction which American investment group Cerberus and German technical services provider Dekra were quick to join. GL management sought help from BHF Bank to defend against the BV offer and, should survival as an independent society not be possible, to find a friendlier ‘white knight’ to take over the company.

Norway’s Det Norsk Veritas, with whom GL had previously discussed closer cooperation in the context of mutual independence, emerged as the possible friendly partner, expressing interest in both merger and acquisition options. Inviting GL for talks, DNV expressed concern that a leading classification society should be the subject of open bidding in the financial markets and said it would only act in the interests of GL and the German maritime community. GL made no immediate response to DNV but made clear it would fight the BV bid, which did not reflect the true value of a company more profitable and faster growing than its pursuer. GL then wrote to the International Association of Classification Societies asking the IACS to investigate GL’s claim that BV’s hostile bid had broken the Association’s formal code of ethics.

Lloyds Register then joined the fray, offering to buy a minority stake in GL in the interest of maintaining its independence, as the German Government’s new Maritime Coordinator Dagmar Wohrl said the Government would not accept a hostile sale of GL.

Next in the ring was the billionaire German retail tycoon Gunter Herz, whose unconditional bid at a offer price similar to that of BV was welcomed by the GL management board, which recommended acceptance. Mr Herz’s believes that a company of GL’s quality and stature should remain regionally owned.

Both the Herz and BV bids were due to close shortly after MJ went to press.

MJ Information No: 22531