Matson said Wednesday it will acquire the primary assets formerly owned by Reef Shipping, a South Pacific shipping company based in Auckland, New
Zealand, that has been in business since 1968.
The assets include four vessels and about 1,500 pieces of container equipment. The financial terms of the deal were not disclosed. The transaction is expected to close before the end of this year.
"With this acquisition, Matson continues to expand its geographic reach into the South Pacific," said said Matt Cox, president and chief executive officer of Matson. "While the purchase itself is relatively small, it complements our growing network of Pacific island services."
Cox noted this was a return to the area for Matson. He said Matson freighters and luxury passenger ships served the South Pacific for five decades, beginning in the 1920s.
After this acquisition, Matson will continue to provide service to Reef's historic core trade lanes from Auckland and Fiji to the islands of Nauru, the Solomon Islands, Tahiti, Samoa, Cook Islands, Niue, Tonga, Wallis and Futuna, Vanuatu, Tarawa and Majuro - all of which will be new markets for Matson.
In addition to the Hawaiian Islands, which Matson has been serving continuously since 1882, the company's Pacific island services now include Guam, the Northern Mariana Islands, Palau, Micronesia and the Marshall Islands.
Michael Webber, an analyst ant Wells Fargo security said that while no purchase price for Reef was disclosed, management indicated the deal is relatively small, less than $5 million or 5 percent of Matson's ocean transportation operating profit, and "priced attractively, with no premium for business/franchise value."
Webber did not expect the transaction to have a significant impact on Matson's near-term operating results, but there is a small, long-term benefit possible and highlights another potential avenue for modest growth for Matson, "which could look to eventually expand in other similar, small markets (with a focus on the Pacific)."
Back in July, Maersk said it was ending acceptance of cargo for Wallace and Futuna and Vanuatu
Earlier this month, Mariana Express Lines said it would start service to the U.S. West Coast through a partnership with Horizon Lines
. - Chris Dupin