As expected, the Hamburg City Parliament has given the green light for the controversial entry of the world's largest shipping company MSC into the port logistics group HHLA.

On Wednesday evening, the coalition majority pushed the red-green senate's plan over the finishing line. This means that nothing stands in the way of the deal politically. Just under a year ago, even the HHLA Executive Board was surprised by the plans of the City of Hamburg and the Geneva-based shipping giant. In Hamburg, the headquarters of Germany's largest container shipping company Hapag-Lloyd, the deal had triggered some fierce criticism - not only for economic reasons, but also because of the city's identity, which is strongly linked to the port.

The Free and Hanseatic City of Hamburg remains the majority owner of HHLA. However, it is transferring shares in the listed HHLA subgroup to the Mediterranean Shipping Company (MSC), meaning that the shipping company owned by the family of MSC founder Gianluigi Aponte will in future hold just under half of the traditional Hamburg-based company. MSC announced its intention to invest in Germany's largest seaport and bring more cargo there. However, critics continue to fear that MSC will have too much influence and that the future of HHLA - the Hanseatic city's largest terminal operator - is uncertain.

On Wednesday, the city parliament voted in favor of the partial sale of HHLA in a roll-call vote in the second and final reading. This was immediately preceded by another heated debate in which representatives of the CDU, the Left Party and the AfD sharply criticized the deal: as "great damage for Hamburg", as a "sell-out" of the port operator and as a "pure act of desperation". The defense of the project by Senator for Economic Affairs Melanie Leonhard (SPD) and members of parliament from the SPD and the Greens as a sensible solution to strengthen HHLA was accompanied by loud heckling. The debate was also followed by port workers in the audience.

APPROVALS FROM BRUSSELS AND KIEV STILL PENDING

The transaction is expected to be completed by the end of the year. However, the EU Commission still has to give its approval. The talks in Brussels are going according to plan, said a spokesperson for the Hamburg economic authority when asked. Approval is expected in the course of the year. The Ukraine's antimonopoly commission has also yet to give its approval. HHLA has a port in Odessa, but transhipment across the Black Sea has been suspended since the start of the war.

For HHLA, the business with the financially strong shipping company comes at a time of economic turbulence. Just three weeks ago, HHLA abandoned its goal of achieving an operating profit (EBIT) of around 400 million euros for the Group as a whole by 2025. Due to the ongoing war in Ukraine, the crises in the Middle East, the weak economy and market changes, the EUR 400 million mark is now not considered realistic until 2027 at the earliest. At the same time, however, HHLA, which also operates ports in Tallinn and Trieste, increased its revenue and profit significantly in the second quarter. And in the Port of Hamburg, where HHLA operates three out of four terminals, container throughput, which had previously been declining, also remained virtually stable in the first half of the year.

(Report by Elke Ahlswede, edited by Ralf Bode. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com)