Hapag-Lloyd AG has agreed to a merger deal with United Arab Shipping Company (UASC), creating a group that should be valued at around 7-8 billion euros.
Hapag’s supervisory board approved the deal, which should see them acquiring all of UASC’s shares. Plans for the deal were unveiled in April, and the deal received backing by UASC shareholders earlier this month. However, Hapag-Lloyd’s anchor shareholders and UASC shareholders still need to give final consent for the deal. Hapag-Lloyd did say in a statement though that, “an extraordinary general meeting of UASC will be held in Dubai on June 29,” all but solidify this arrangement.
In a presentation to analysts last month, Hapag-Lloyd placed itself fifth globally in terms of carrier capacity, and UASC in eleventh place. A merger between the two would consolidate the group’s combined 5th place appearance, edging them closer to the nubmer four spot held by COSCO Container Lines.
Besides full mergers companies are also seeking alliances and vessel sharing arrangements to pool trips and save money. Hapag-Lloyd last month unveiled a new alliance due to start in April 2017, which it said UASC would join if the merger plans were successful. Benefits for the merger include Hapag gaining access to bigger ships on the important Asia to Europe trade route. UASC would gain wider access to trans-Atlantic and trans-Pacific loops, where Hapag is strong.