UNION COMPANY TAKE-OVER BID

Press, Volume CX, Issue 32394, 5 September 1970, Page 1

UNION COMPANY TAKE-OVER BID

Australian Surprise; N.Z. Concern (N.Z.P.A. Staff Correspondent) SYDNEY, September 4. The announcement that Thomas Nationwide Transport, Ltd, was negotiating to buy the Union Steam Ship Company fell like a bombshell in Australia today.

There had been no inkling that T.N.T., the largest road transport and freight-forwarding organisation on both sides of the Tasman, was interested in the Union Company.

But after the initial] shock, observers in Sydney were quick to point; out there might be; major advantages for New Zealand if the deal were successful and' T.N.T. gained control of the company.

The Union Steam Ship Company has six modern roll-on roll-off ships and about 25 conventional ships in its fleet.

In recent years there has been much criticism of the Union Company’s operations on the Tasman. Many critics have bemoaned the lack of competition on the shipping lanes between Australia and New Zealand to spur the company to provide improved service for shippers.

The advent of the roll-on roll-off vessels Maheno and Marama last year has improved services on the Tasman. But there have still been many complaints. Speculation in Sydney today was that exporters and importers on both sides of the Tasman could look forward to an improved, integrated transport arrangement if T.N.T. gained control of the Union Company. Faster Delivery New Zealand shippers, for example, could expect fasten delivery of goods to Australian customers. T.N.T.’s door-to-door service would quicken delivery of goods once they were landed from the Tasman ships. Observers say that any criticism of the take-over by an Australian company of a firm run from New Zealand will be muted by the knowledge that the Union Company is already owned by the British P. and O Group. But the move raises some intriguing issues. None more so than the fact that P. and O owns about 30 per cent of the shares in Mayne Nickless, one of T.N.T.’s major competitors in New Zealand through Allied Freightways. There is also a good deal of interest in how T.N.T. would arrange its ownership of the Union Company. Australian Crews If the firm operated the shipping line as a whollyowned subsidiary this could lead to demands by Australian seamen for the right to crew what would be essentially Australian ships. But this problem could be overcome by T.N.T. running the Union Company tn much the same way as does the P. and O.

Observers see this as a probability after statements today by both companies that the proposals envisage a “sub. stantial degree” of New Zea-land-domiciled ownership. T.N.T., an aggressive 25-year-old transportation firm.

I covers as its name implies, the whole of Australia. : It works in New’ Zealand l through its subsidiary comjpanies Alltrans Group (N.Z.), 'Ltd, and Rudder’s Customs and Shipping (N.Z.), Ltd. I Alltrans began in New Zealand in 1964 and was taken over by T.N.T. three years later. General Link Today, T.N.T. is the largest freight forwarder in Australia, linking all main centres and carrying more than 250.000 tons of freight a year. The company also works in Canada and the United States. Earlier this week it announced its first major move into the shipping business when it acquired a one-third interest in Bulkships, Ltd, whose subsidiary. Associated Steamships, Proprietary, Ltd, runs three modern Australian coastal container vessels Negotiations, according to Melbourne sources, could take up to six months before a final deal is reached and would involve tens of millions of dollars.

The managing director of T.N.T., Mr H. P. Abeles, and the general manager, Mr R. Cribb, are in New Zealand for the negotiations.

In Auckland last night Mr Abeles said that a principle to be adhered to in any decision reached over the Union ’Steam Ship Company, would be to allow a substantial amount of New .Zealand interest But he could not say how the company would be formed, according to the Press Association. The T.N.T. group has shareholders’ funds of between 328 m and S3om. Public Company T.N.T. is a public company more than 90 per cent Australian owned. The chairman, Mr K. W. Thomas, founded the company as a sole venture in 1946. It became a private company in 1951. Subsidiary and associated companies were brought together under one head company by the formation of Thomas Nationwide Transport, Ltd, on November 7, 1961.

Mr F. K. Macfarlane, chairman of the Union Company, said in Wellington yesterday that talks were taking place with T.N.T. on tentative proposals which could involve changes in the ordinary shareholding of the Union Company. Govt Advised The Government had been advised of the talks and would be kept informed, said Mr Macfarlane. The proposed take-over lias been described by the New Zealand Seamen’s Union as “merely changing from one overseas monopoly to another.”

Now was the time, said the president of the Seamen’s Union (Mr W. Martin) for the New Zealand Government to step in and take over the company.

It was too soon to make a full comment on the proposed take-over, partly because he was still in the witness box.at the Commission of Inquiry into shipping, said Mr Martin.

Labour Comment The establishment of a local "shipping corporation” to offset the proposed takeover of the Union Steam Ship Company was suggested today by the Labour Party spokesman on industries and commerce, Mr W. W. Freer (Mount Albert). Mr Freer said that the Government “could not stand aloof” and should make it “‘abundantly clear to overseas interests likely to acquire the Union Company that the Government would not automatically transfer its interests and activities to such a group.” He said that the Government activities to which he referred included the rail ferries, which are run by the Union Company. “Although the Union Company has failed in recent years to provide the service that is urgently required in the Pacific, it is a locallybased company using New Zealand vessels and New Zealand crews, and it is a serious thing to see this move to Australian or any other overseas interest,” said Mr Freer. ‘Good Service’ “The fact that some New Zealand ships have been established on the Pacific service by New Zealand companies, shows that it is possible for locally-owned companies to be competitive and provide a good service for exporters,” he said. The Minister of Overseas Trade (Mr Marshall) said today: “At this point the discussion on the purchase of shares in the Union Company is at a private enterprise level.

“The Government is not involved, and has no comment to make.”