The ink is dry: Hapag-Lloyd and UASC sign

Qatar Holding LLC for the State of Qatar and the Public Investment Fund of the Kingdom of Saudi Arabia on the side of UASC

In a separate agreement, the so-called Shareholders Support Agreement (SSA), Hapag-Lloyd AG and Hapag-Lloyd AG have assumed certain obligations in relation to the merger and the further injection of equity. In this agreement, some of the mutual shareholders undertake, among other things, to assume a backstop obligation in the amount of USD 400 million as part of a rights issue of Hapag-Lloyd AG planned within six months of the completion of the merger.

Following the integration, Hapag-Lloyd will be one of the five largest container shipping companies in the world. The fleet will comprise 237 ships - with a total transport capacity of 1.6 million TEU and a planned annual transport volume of around 10 million TEU. The company's turnover will amount to around USD 12 billion. Hapag-Lloyd will remain a listed company registered in Germany and headquartered in Hamburg. CSAV, HGV (City of Hamburg) and Kühne Maritime will remain anchor shareholders of Hapag-Lloyd. The previous majority shareholders of UASC, Qatar Holding LLC (QH) and the Public Investment Fund of the Kingdom of Saudi Arabia (PIF) will become new core shareholders of Hapag-Lloyd with 14 percent (QH) and 10 percent (PIF).

"This strategic merger makes perfect sense for both partners as we combine UASC's growing global footprint and young and highly efficient fleet with Hapag-Lloyd's broad, diversified market coverage and strong customer base. In addition, Hapag-Lloyd gains access to the largest container ship class," said Rolf Habben Jansen, CEO of Hapag-Lloyd, on the occasion of the signing of the BCA. "Following the successful integration of CSAV, which was completed in mid-2015, this transaction with UASC is another milestone in Hapag-Lloyd's history. The merger strengthens our position as the fifth largest global liner shipping company."

The fleet of 237 vessels includes six Ultra Large Container Vessels (ULCV) with a capacity of 18,800 TEU and eleven vessels with a capacity of 15,000 TEU, the last units of which will be delivered soon. With an average age of 6.6 years and an average ship size of 6,600 TEU, the combined company will have one of the most modern and efficient fleets in the industry.

The company will also be the largest partner in the new "THE Alliance", consisting of Hanjin, Hapag-Lloyd, K-Line, Mitsui O.S.K Lines, Nippon Yusen Kaisha and Yang Ming. This alliance is scheduled to commence operations in April 2017 and will cover all East-West trade lanes including Asia-Middle East/Persian Gulf and Red Sea.

"With this Business Combination Agreement, Hapag-Lloyd and UASC are demonstrating their active role in consolidating and shaping container shipping. With this new transaction we are not only expanding our market position, but also our service portfolio. The combination will generate annual net synergies of at least USD 400 million and save the company high investments," said Michael Behrendt, Chairman of the Supervisory Board of Hapag-Lloyd.

The Extraordinary Shareholders' Meeting of UASC and the Supervisory Board of Hapag-Lloyd have approved the transaction in their respective meetings, demonstrating the strong support and continued commitment of the major shareholders. At the Annual General Meeting in August, the shareholders of Hapag-Lloyd AG will be asked to approve authorized capital to be used, among other things, to implement the merger.

"In its 40-year history, UASC has grown from a regional shipping company to a global player with comprehensive coverage of the main trades and a state-of-the-art fleet," said Dr. Nabeel Al-Amudi, Chairman of the Board of Directors of UASC. "We are very proud of UASC's achievements over the past years, which have paved the way for this remarkable transaction."

Once all competition law and contractual approvals have been obtained, the merger is expected to be completed by the end of 2016. Until then, UASC and Hapag-Lloyd will continue to operate as independent companies and will continue to operate in their respective alliances until the end of March 2017, when "The Alliance" will be launched.

About Hapag-LloydWith a fleet of 175 modern container ships and a total transport capacity of 955,000 TEU, Hapag-Lloyd is one of the world's leading liner shipping companies. The company has around 9,400 employees at 361 locations in 118 countries. Hapag-Lloyd has a container fleet of 1.6 million TEU - including one of the largest and most modern reefer container fleets. 122 liner services worldwide ensure fast and reliable connections between all continents. Hapag-Lloyd is one of the leading providers in the Transatlantic, Latin America and Intra-America trades.

About United Arab Shipping CompanyUnited Arab Shipping Company (UASC) is a global shipping company headquartered in the Middle East, founded in 1976, with 185 offices worldwide. The company is the largest liner shipping company in the Middle East and neighboring markets, serving 275 ports. UASC offers its worldwide customers container transportation, temperature-controlled transport (reefer), special shipments and other services.