The shipping company with the largest share of the Hawaii market said Tuesday it will buy the Alaska operations of its competitor.
Matson Inc., which has the largest share of the U.S. mainland-to-Hawaii market, said it will buy Horizon Lines Inc. for $69 million. Matson will also acquire Horizon's debt.
Separately, Horizon will sell its Hawaii operations to The Pasha Group for $142 million and shut down its Puerto Rico business.
Matson CEO Matt Cox said in a statement the deal is a rare opportunity to substantially grow the company's Jones Act business.
The Jones Act requires vessels shipping goods between states to have been built in the United States, be crewed and owned by U.S. citizens, and fly the U.S. flag.
"We are also encouraged by the long-term prospects of the Alaska market, which mirrors Hawaii in many operational ways, despite different underlying economic drivers," Cox said.
Matson will pay for the deal with cash on hand and revolving credit. The transaction is expected to close next year after Horizon sells its Hawaii business to Pasha.
The companies said the total value of the deal is $456 million, based on Horizon's net debt outstanding as of Sept. 21, less the anticipated proceeds from the sale of its Hawaii business.
Horizon, which is based in Charlotte, North Carolina, has been serving Alaska with container ships since 1964. The company has two weekly sailings from Tacoma to Anchorage and Kodiak, and a weekly sailing to Dutch Harbor. It has three Jones Act-qualified container ships.
Matson, which has headquarters in Honolulu, serves Hawaii as well as Guam, Micronesia and some South Pacific islands. It also operates a service between China and Southern California. It has a fleet of 21 container ships, combination container and roll-on roll-off ships, and custom-designed barges.