German ocean carrier Hapag-Lloyd reached an agreement with United Arab Shipping Company on a merger that would make Hapag-Lloyd the fifth largest container carrier in the world.
German ocean carrier Hapag-Lloyd announced Tuesday it has reached an agreement with United Arab Shipping Company (UASC) on a merger that would make Hapag-Lloyd the fifth largest container carrier in the world.
The business combination agreement would provide for the contribution of all shares in UASC to Hapag-Lloyd.
The combined companies are seen as a good match because of UASC’s strong presence in the Middle East where Hapag-Lloyd currently depends on agents. UASC shareholders, which consist of six countries in the Middle East, would become major shareholders in a long established global carrier.
UASC has been an aggressive builder of large new ships, and a combination will increase the average size of ships in Hapag-Lloyd’s fleet and lower the average fleet age.
Hapag-Lloyd first revealed it was discussing a possible combination with UASC back in April.
The German carrier has a combined fleet of owned and chartered ships with 925,057 TEUs of capacity and UASC has a combined fleet with 541,146 TEUs, according to container shipping analyst Alphaliner’s list of the top 100 container liner carriers by global capacity.
Their combined fleet of 1.46 million TEUs would push Hapag-Lloyd from sixth to fifth place among container carriers in terms of capacity, larger than Evergreen, but still trailing behind Maersk, MSC, CMA CGM and China COSCO Shipping (the recent product of the merger of Chinese carriers COSCO and China Shipping).
Hamburg-based Hapag-Lloyd said its supervisory board approved the transaction “subject to the anchor shareholders of Hapag-Lloyd and UASC agreeing to assume the commitments levied upon them in the BCA.”
Since both companies are controlled by a small number of shareholders, the deal is expected to be completed rapidly.
Hapag-Lloyd’s major shareholders include Chile’s CSAV, which merged its container operations with Hapag Lloyd in 2014, with 31.4 percent; HGV, the City of Hamburg’s investment company, with 20.6 percent; transportation maganate Klaus Michael Kuhne, 20.2 percent; and the tourism company TUI, which once owned Hapag-Lloyd, with 12.3 percent.
Conclusion of binding agreements is still subject to the consent of UASC shareholders, which consists of investment companies of governments of six countries. Qatar owns about 51 percent, flowed by Saudi Arabia at about 36 percent, and with smaller stakes held by Kuwait, Iraq, the United Arab Emirates and Bahrain. An extraordinary general meeting of UASC to grant such consent will be held in Dubai on Wednesday, June 29.
NEWS FLASH: Hapag-Lloyd agrees on merger deal with UASC
