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Hapag-Lloyd, UASC announce merger

[ July 21, 2016   //   ]

Hapag-Lloyd AG (Hapag-Lloyd) and United Arab Shipping Company S.A.G. (UASC) signed a Business Combination Agreement (BCA) to merge both companies on July 18, subject to the necessary regulatory and contractual approvals.
Following the integration, the new Hapag-Lloyd will rank among the five largest container shipping lines in the world, with 237 vessels and a total transport capacity of around 1.6 million TEU, an annual transport volume of 10 million TEU and a combined turnover of approximately $12 billion.
The combined company will remain a registered and stock listed company in Germany with its head office in Hamburg. CSAV, HGV (City of Hamburg) and Kühne Maritime will remain controlling shareholders of Hapag-Lloyd. The majority shareholders of UASC, Qatar Holding LLC (QH) and The Public Investment Fund of the Kingdom of Saudi Arabia (PIF), will become new key shareholders of Hapag-Lloyd holding 14% and 10%, respectively.
“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,” said Rolf Habben Jansen, CEO of Hapag-Lloyd, upon signing the agreement. “Furthermore, it will give the new Hapag-Lloyd access to Ultra Large Container Vessels.”
He added that after the successful integration of CSAV, which was concluded mid 2015, this transaction with UASC is a historic milestone for Hapag-Lloyd. “The merger reinforces our position as a top five and one of the largest truly global carriers in liner shipping,” Jansen said.

The combined company will have a global, diversified trade portfolio, with leading product offerings in the major East-West and North-South trades. In addition, it will leverage on UASC´s solid presence in Middle Eastern markets and trades, with a commitment to further strengthening this presence by establishing a fifth Hapag-Lloyd Regional Center in Dubai.

“With this merger, we are embarking on an exciting new phase of UASC´s growth”, said Jorn Hinge, president and CEO of UASC. “Leveraging on UASC´s heritage in the Middle East, as well as our recent growth in other markets, the combined company will provide customers with valuable expertise and very efficient service offerings in all major trade lanes and markets around the world.”

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.
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.

“Hapag-Lloyd and UASC now take the next step to further consolidate and shape the liner shipping industry,” commented Michael Behrendt, Chairman of the Supervisory Board of Hapag-Lloyd. “The new transaction is strengthening not only our market position, but also our service portfolio. The merger will create annual net synergies of at least US$400 million and save a significant amount of capital expenditure for the company.”
During its 40-year history, UASC has grown from a regional carrier to a global one with comprehensive coverage of the main trade lanes and a state-of-the-art fleet.  “We are very proud of UASC´s achievements over the years that paved the way for such a remarkable deal,” stated Dr. Nabeel Al-Amudi, Chairman of the Board, UASC.

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