Maritime economy
6+10=5: Shipping company Hapag-Lloyd merges with UASC
Hamburg/Dubai, 29.06.2016 - Hapag-Lloyd, the world's sixth-largest shipping company, has announced its merger with the world's number ten, United Arab Shipping Company (UASC). The merger will create the fifth largest shipping company in the world, with the former UASC holding the largest single share.
Specifically, the Arabs will receive 28% of the merged shipping company, with Hapag-Lloyd retaining 72% of the shares. The Hamburg-based company's Supervisory Board has already approved the deal and UASC's Annual General Meeting is expected to approve it on June 29. Hapag-Lloyd and UASC will jointly operate a fleet of owned and chartered vessels with a total capacity of 1.5 million TEU. Despite the armada of 225 ships, this amounts to a market share of around seven percent in the overall market. However, market leader Maersk is still within reach and currently has a market share of 15 percent.
UASC was founded in 1975 and since then has combined the shipping operations of the Gulf states of Kuwait, Bahrain, Qatar (51.3%), Iraq, Saudi Arabia (35%) and the United Arab Emirates. UASC's fleet comprises around 40 owned and 28 chartered ships. Among the company's own ships are six vessels in the 18,000 TEU class, which Hapag-Lloyd has not operated to date.
Prior to the merger, the shareholder structure of Hapag-Lloyd was as follows:
It is expected that the side agreements of the shareholders of UASC and Hapag-Lloyd will be finalized in the next two weeks and that the new shareholder structure of the merged shipping companies will then be finalized. With this deal, Hapag-Lloyd CEO Rolf Habben-Jansen has already achieved the second merger during his term of office: one and a half years ago, Habben-Jansen completed the merger with the Chilean shipping company CSAV initiated by his predecessor Michael Behrendt. In general, the strategy of countering falling freight rates and overcapacity on the market with mergers and cooperations is considered promising and the method of choice. ms
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