[290716.EN.SEA] Hapag-Lloyd Inks Agreement With UASC To Merge

GERMAN-CHILEAN transportation company Hapag-Lloyd and United Arab Shipping Company (UASC) have signed a business combination agreement to merge both companies.

Following the integration, the new Hapag-Lloyd will rank among the five largest container shipping lines in the world, with 237 vessels and a total transport capacity of around 1.6 million TEU and an annual transport volume of 10 million TEU. The merged entity will have a combined turnover of approximately US$12 billion, according to The Maritime Executive.

The fleet of the combined company will include UASC's six recently received 18,800 TEU ships, known for their superior eco-efficiency credentials, as well as eleven newly built 15,000 TEU ships, the last of which will be delivered soon. With an average age of 6.6 years and average size of 6,600 TEU the combined company will have one of the most modern and efficient vessel fleets in the industry.

The combined company will remain a registered and stock listed company in Germany with its head office in Hamburg. CSAV, HGV (City of Hamburg) and Kuhne Maritime will remain controlling shareholders of Hapag-Lloyd.

The majority shareholders of UASC, Qatar Holding LLC (QH) and The Public Investment Fund of the Kingdom of Saudi Arabia (PIF), will become new key shareholders of Hapag-Lloyd holding 14 per cent (QH) and 10 per cent (PIF) respectively.

CEO of Hapag-Lloyd, Rolf Habben Jansen, said: "This strategic merger makes a lot of sense for both carriers as we are able to combine UASC's emerging global presence and young and highly efficient fleet with Hapag-Lloyd's broad, diversified market coverage and strong customer base.

"Furthermore it will give the new Hapag-Lloyd access to ultra large container vessels. After the successful integration of CSAV which was concluded mid of 2015 this transaction with UASC is another historic milestone for Hapag-Lloyd. The merger reinforces our position as a top five and one of the largest truly global carriers in liner shipping."

President and CEO of UASC, Jorn Hinge, said: "With this merger, we are embarking on an exciting new phase of UASC's growth. Leveraging on UASC's heritage in the Middle East as well as our recent growth in other markets, the combined company will provide customers with valuable expertise and very efficient service offerings in all major trade lanes and markets around the world".

The company will be the key player in the new "THE Alliance" consisting of Hanjin, Hapag-Lloyd, K-Line, Mitsui O.S.K Lines, Nippon Yusen Kaisha and Yang Ming. THE Alliance is scheduled to begin operation in April 2017 and will cover all East-West trade lanes including Asia-Middle East/Arabian Gulf and Red Sea.

Following regulatory and contractual approvals, the merger is expected to be completed by the end of 2016. Until then, UASC and Hapag-Lloyd will continue to operate as stand-alone companies. Each company will also operate in its own alliance as currently structured until the end of March 2017, after which THE Alliance will commence operations.

Source : HKSG.