Hapag-Lloyd and United Arab Shipping Company (UASC) announced a business combination agreement to create “The New Hapag-Lloyd” with a fleet of 237 vessels.
With this new deal, the German-Chilean company Hapag-Lloyd gets a place between the five largest container shipping lines in the world with an annual turnover of approximately $1.2 billion.
“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.
The deal will also give Hapag-Lloyd access to six 18,800 TEU vessels and eleven newly built 15,000 TEU ships which will create one of the most modern and efficient vessel fleets in the industry.
The merger is expected to be complete by the end of 2016 and will play a major role in THE Alliance, consisting of Hanjin, Hapag-Lloyd, K-Line, Mitsui O.S.K Lines, Nippon Yusen Kaisha and Yang Ming.
This mega-combination will begin its operations 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. 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 $400 million and save a significant amount of capital expenditure for the company,” said Michael Behrendt, Chairman of the Supervisory Board of Hapag-Lloyd.
The new company’s headquarter will remain in Hamburg, Germany. Chile’s CSAV, the City of Hamburg and Kuehne Maritime will remain controlling shareholders while UASC’s majority shareholders, Qatar Holding, and the Saudi Public Investment Fund (PIF), will become major shareholders in the new group, holding 14 and 10 percent respectively.