Meli Marine
H A R V A R D
B U S I N E S S
S C H O O L
BRIEF CASES
4426
A f ' K I L 19. 2013
lUCHAJllJ I)
HrtML-RMF.SH
iiLiNRU YONG
Meli Marine
It was past midnight, but David Tian, CEO of Singapore-based Meli Marine, could not sleep. The next board meeting was just two weeks away in early February 2008. Edwin Chang, the founder of the company and chairman of the board, had called earlier to hear Tian's assessment of a potential acquisition. "This could be.1 the biggest turning point in Meli's history," Chang had said. "Are we ready to become a global pLiyer?" Tian had to admit that ho had not yet reached a conclusion.
The acquisition under consideration was of the vessel assets of an indirect competitor, Teeh-Sah
Holdings. Tero-Sah operated a container carrier business in the trans-Pacific, Asia-to-North America shipping lanes. It had announced in late 2007 that it would exit the vessel operations business to concentrate on its much larger terminal-management operations, and it was selling 16 ships with an average capacity of 4,500 TEUs1 each. Meli Marine was a leading container carrier in the intra-Asia market, but it had no presence on the major Asia-North America sea lanes. Initial discussions with
Teeh-Sah indicated that pricing for the 16 vessels would be attractive. The question that David Tian had not yet answered was whether entering the Asia-North America market was the right move for
Meli Marine.
The Container Shipping Industry
The cargo shipping industry provides the links required for global commerce, making physical international trade possible. Rail, road, and air transport are used where geography or cargo-type permit, but global trade relies primarily on trans-oceanic shipping. This industry is comprised of four main segments: (1) container shipping, (2) roll-on, roll-off (also known as "ro-ro") used especially for vehicles, (3) industrial or bulk shipping for commodities such as steel and grains, and
(4) tanker
B U S I N E S S
S C H O O L
BRIEF CASES
4426
A f ' K I L 19. 2013
lUCHAJllJ I)
HrtML-RMF.SH
iiLiNRU YONG
Meli Marine
It was past midnight, but David Tian, CEO of Singapore-based Meli Marine, could not sleep. The next board meeting was just two weeks away in early February 2008. Edwin Chang, the founder of the company and chairman of the board, had called earlier to hear Tian's assessment of a potential acquisition. "This could be.1 the biggest turning point in Meli's history," Chang had said. "Are we ready to become a global pLiyer?" Tian had to admit that ho had not yet reached a conclusion.
The acquisition under consideration was of the vessel assets of an indirect competitor, Teeh-Sah
Holdings. Tero-Sah operated a container carrier business in the trans-Pacific, Asia-to-North America shipping lanes. It had announced in late 2007 that it would exit the vessel operations business to concentrate on its much larger terminal-management operations, and it was selling 16 ships with an average capacity of 4,500 TEUs1 each. Meli Marine was a leading container carrier in the intra-Asia market, but it had no presence on the major Asia-North America sea lanes. Initial discussions with
Teeh-Sah indicated that pricing for the 16 vessels would be attractive. The question that David Tian had not yet answered was whether entering the Asia-North America market was the right move for
Meli Marine.
The Container Shipping Industry
The cargo shipping industry provides the links required for global commerce, making physical international trade possible. Rail, road, and air transport are used where geography or cargo-type permit, but global trade relies primarily on trans-oceanic shipping. This industry is comprised of four main segments: (1) container shipping, (2) roll-on, roll-off (also known as "ro-ro") used especially for vehicles, (3) industrial or bulk shipping for commodities such as steel and grains, and
(4) tanker