By Mark Edward Nero
On July 18 shippers Hapag-Lloyd AG and United Arab Shipping Co. (UASC) said that they have signed an agreement to merge both companies, subject to necessary regulatory and contractual approvals.
The merger is expected to be completed by the end of 2016, following regulatory and contractual approvals. Until then, UASC and Hapag-Lloyd continue to operate as stand-alone companies.
Following the merger, the new Hapag-Lloyd is expected to rank among the five largest container shipping lines in the world, with 237 vessels and a total transport capacity of around 1.6 million twenty-foot equivalent units, an annual transport volume of 10 million TEU and a combined turnover of about $12 billion.
The combined company would remain a registered and stock listed company in Germany with its head office in Hamburg. CSAV, the City of Hamburg and Kühne Maritime would remain controlling shareholders of Hapag-Lloyd, while the majority shareholders of UASC, Qatar Holding and the Kingdom of Saudi Arabia, would become new key shareholders of Hapag-Lloyd, with Qatar having 14 percent and Saudi Arabia controlling 10 percent.
The fleet of the combined company will consist of 237 ships – including 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.
“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,” Hapag-Lloyd CEO Rolf Habben Jansen said upon signing the agreement. “Furthermore it will give the new Hapag-Lloyd access to Ultra Large Container Vessels. The merger reinforces our position as a top five and one of the largest truly global carriers in liner shipping.”
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.