Hapag-Lloyd and UASC Merge

Hapag Lloyd and United Arab Shipping Co. (UASC) have formalized the merger of both companies by signing a Business Combination Agreement (BCA). Once the integration is complete, the new Hapag-Lloyd will rank among the five largest shipping companies in the world, with 237 vessels and a capacity to transport 1.6 million TEUs, in addition to an annual movement volume of 10 million TEUs and an estimated combined revenue of $12 billion.

The combined fleet of both companies will include six vessels of 18,800 TEUs, designed to maximize environmental protection, as well as another eleven vessels of 15,000 TEUs, the last of which will be delivered soon.

The new Hapag-Lloyd will play a prominent role in “The Alliance,” which will begin operations in April 2017, with a special focus on routes connecting Asia and the Middle East, the Persian Gulf, and the Red Sea, and will include Hapag-Lloyd, Kawasaki Kisen Kaisha (“K” Line), Mitsui OSK Lines (MOL), Nippon Yusen Kaisha (NYK), and Yang Ming.

The company resulting from the merger of Hapag-Lloyd and UASC will continue to be listed in Germany and will be headquartered in Hamburg. The entities CSAV, HGV –representing the city-state of Hamburg– and Kühne Maritime will remain the majority shareholders of Hapag Lloyd, while Qatar Holding and the Public Investment Fund of Saudi Arabia, the main shareholders of UASC, will control 14% and 10% of the shares of the new company, respectively.

Alongside the Business Combination Agreement, the main shareholders of both companies have signed a Shareholder Support Agreement, in which they undertake “certain commitments regarding the merger and the capital funds of the company resulting from the integration.”

Signatories of this document include CSAV Germany Container Holding, HGV Hamburger Gesellschaft für Vermögens und Beteiligungsmanagement, and Kühne Maritime, on behalf of Hapag Lloyd, and Qatar Holding and the Public Investment Fund of Saudi Arabia, on behalf of UASC.

The company resulting from this process will offer its customers a global and diversified offering, especially on routes between North and South and between East and West, and will also leverage UASC's strong presence in the Middle East, with the launch of its fifth Hapag-Lloyd Regional Center, which will be located in Dubai (United Arab Emirates).

Photo: Kuehne + Nagel International AG.