Hapag-Lloyd and United Arab Shipping Company (UASC) officially merged, in Hamburg, on May 24. Hapag-Lloyd will remain a publicly traded company registered in Germany with its headquarters in Hamburg. The business combination agreement (BCA) had already been signed in Hamburg in July 2016.
“We now not only have a very strong market position in Latin America and the Atlantic, but also in the Middle East, where we will become one of the leading carriers. Our priority now is a smooth and fast integration of UASC and Hapag-Lloyd”, said Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd.
At the center of the integration is the combination of 118 Hapag-Lloyd services with the 45 services making up UASC’s network. This process will start in roughly eight weeks and will take until the end of the third quarter, once the new employees from UASC have been trained to use the Hapag-Lloyd systems. After that UASC’s present transport volume will be handled on Hapag-Lloyd’s IT platform. The combined entity will thereby carry an estimated annual transport volume in excess of 10 million TEU.
UASC’s 58 vessels will be integrated into the fleet of Hapag-Lloyd. The combined fleet will then include a total of 230 vessels and be one of the youngest in the industry, with an average ship age of only 7.2 years. The merger made Hapag-Lloyd the fifth-largest liner shipping company in the world.
Hapag-Lloyd plans to achieve annual synergies of USD 435 million as a result of the merger. It will also establish a new regional headquarters for the Region Middle East.
“By merging with the Canadian shipping company CP Ships in 2005 and, more recently, with CSAV in 2014, we have demonstrated that we are able to combine businesses and integrate them quickly, efficiently and profitably,” said Rolf Habben Jansen.
The two majority shareholders of UASC, Qatar Investment Authority, through its subsidiary Qatar Holding LLC, and the Public Investment Fund of the Kingdom of Saudi Arabia (PIF), will become new key shareholders of Hapag-Lloyd.
Within six months after the closing, a cash capital increase by way of a rights issue is planned for Hapag-Lloyd AG in order to strengthen the company. This will be secured via a backstop commitment in the amount of USD 400 million that some of the controlling shareholders have agreed to. At the Annual General Meeting of Hapag-Lloyd, to be held on May 29 in Hamburg, shareholders will be asked to approve a corresponding appropriate authorized capital.