German container line Hapag-Lloyd AG and its peer United Arab Shipping Company SAG (UASC) have agreed to merge to form the world’s fifth largest shipping company.
Controlling shareholders of the two companies have committed to backstop a cash capital increase of $400 million by way of a rights issue within six months after the closing of the transaction. The deal is subject to regulatory approvals and customary closing conditions, and is expected to be completed by the end of 2016.
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 per cent (QH) and 10 per cent (PIF) respectively.
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 USD 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 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.
“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. Furthermore it will give the new Hapag-Lloyd access to Ultra Large Container Vessels”, said Rolf Habben Jansen, CEO of Hapag-Lloyd.
“With this merger, we are embarking on an exciting new phase of UASC´s growth”, said Jorn Hinge, President and CEO of UASC.
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.
With a fleet of 175 modern container ships and a total capacity of 955,000 TEU, Hapag-Lloyd is one of the world’s leading container liner shipping companies. The company has approx. 9,400 employees at 361 sites in 118 countries. Hapag-Lloyd has a container fleet of 1.6 million TEU – including one of the world’s largest and most state-of-the-art reefer fleets. 122 liner services worldwide ensure fast, reliable connections between all the continents. Hapag-Lloyd is one of the leading operators in the Atlantic, Latin America and Intra-Americas trades. The company was formed in 1970 through a merger of Hamburg America Line (HAPAG), which dated from 1847, and Norddeutscher Lloyd (NDL) or North German Lloyd (NGL), which was founded in 1856.
United Arab Shipping Company (UASC) is a global shipping company based in the Middle East. Founded in 1976, UASC has 185 offices around the world. The company is the largest container shipping line in the Middle East region and adjacent markets, covering 275 ports and destinations worldwide. UASC offers containerized cargo transportation, temperature controlled (reefer) and out of gauge cargo amongst other value added services to a diversified global client-base.