Chile's Vapores in Merger Talks with Germany's Hapag-Lloyd

Chilean shipping firm Compania Sud Americana de Vapores said it was in merger talks with German container shipping company Hapag-Lloyd, confirming a newspaper report.

In recent years, Vapores has faced steep losses as it grapples with lower shipping rates, high fuel prices and expensive leases, and has sought ways to become more competitive.

"In recent years Vapores has adopted a series of measures to confront the difficulties facing the shipping business, among these are the implementation of joint operations with other shippers and agreements to combine cargo," the Chilean company said in a statement.

"Vapores currently is in talks with diverse actors in the industry, including negotiations with German company Hapag-Lloyd" for a possible tie-up in the container-shipping business, it added.

No agreement has been reached yet, Vapores said.

Top executives of both companies met two weekends ago in Miami to sound out a number of options, including a merger, German daily Die Welt previously reported without naming sources.

The German paper had said that talks between the companies, which previously considered a cross-ownership deal several years ago, were at an early stage.

Vapores' shares ended 12.99 percent higher on the report, far outpacing a 0.1 percent drop in the blue-chip IPSA index.

Earlier this year, the owners of unlisted Hapag-Lloyd called off a planned merger with rival German shipper Hamburg-Sud because terms could not be agreed.

At the time major Hapag-Lloyd shareholder Klaus-Michael Kuehne had said the combination between the German peers was attractive, arguing it made sense to bolt Hapag's Asia focus to Hamburg-Sud's strength on South American routes.

Under the stewardship of the Luksic family, Chile's richest, Vapores spun off its SAAM storage and logistics unit in 2012 and has bought ships to replace those that were leased as part of a plan to reverse losses.

The Luksic family became Vapores' majority shareholders in early 2012 when the company completed a $1.2 billion capital increase.