Hapag-Lloyd and UASC ink merger deal

The Hapag-Lloyd and UASC merger has moved closer to completion after the two signed a business combination agreement to merge both companies ‒ which will see the combined entity rank among the five largest container shipping lines in the world.

The merger is expected to be completed by the end of this year, following regulatory and contractual approvals.

The combined entity will have 237 vessels, a transport capacity of around 1.6 million teu, an annual volume of 10 million teu and a combined turnover of approximately US$12 billion. The company will remain a registered and stock-listed company in Germany with its head office in Hamburg.

CSAV, City of Hamburg and Kuhne Maritime will remain controlling shareholders of Hapag-Lloyd. The majority shareholders of UASC, Qatar Holding and the Public Investment Fund of Saudai Arabia, will become new key shareholders of Hapag-Lloyd, holding 14 per cent (Qatar Holding) and 10 per cent (Pubic Investment fund of Saudi Arabia).

Hapag-Lloyd chief executive Rolf Habben 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.”

The merger will bring in UASC’s six 18,800 teu vessels, and 11 15,000 teu newbuilds. The average ship size will increase to 6,600 teu, with an average age of 6.6 years.

Chairman of Hapag-Lloyd Michael Behrendt added: “Hapag-Lloyd and UASC now take the next step to further consolidate and shape the liner shipping industry. The new transaction is strengthening not only our market position, but also our service portfolio.”

At the same time as this announcement, Hapag-Lloyd has issued a profit warning; it has adjusted its outlook for the financial year 2016 as the development of freight rates is “significantly weaker than expected”.