Hapag-Lloyd and UASC merger complete, creating 230-ship fleet
GERMAN shipping giant Hapag-Lloyd, has completed its merger with Kuwait's United Arab Shipping Co (UASC), it has been announced.
The combined fleets of Hapag-Lloyd and UASC will include 230 vessels with a shared capacity of 1.6 million TEU with vessel sizes averaging 6,840 TEU.
As a member of the "THE" Alliance vessel sharing agreement with Yang Ming, NYK, MOL and "K" Line, Hapag-Lloyd has joined a fleet of 172 vessels offering 118 services. UASC contributes 58 ships offering 45 services.
Hapag-Lloyd will continue as a publicly traded company registered in Germany, with its headquarters in Hamburg, the carrier said.
"This is an important strategic milestone and a big step forward for Hapag-Lloyd," said CEO Rolf Habben Jansen.
"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," he said.
Merger papers have been signed in Hamburg in July 2016. Since then roughly a dozen competition authorities across the world had to grant their approval. In addition, changes in the corporate legal structure were made and the consent of several banks was obtained.
Combining services will start in eight weeks and will be completed by October according to plan, 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 10 million TEU a year.
The combined fleet will be one of the youngest in the industry, with an average ship age of only 7.2 years, said the Hapag-Lloyd statement.
Hapag-Lloyd plans to save US$435 million as a result of the merger, a big part of which should be saved in 2018, though a the larger full amount is expected in 2019.
Hapag-Lloyd will establish a new regional headquarters for the Region Middle East. This will add a fifth Region to the existing Regions North America, Latin America, Asia and Europe.
Said Mr Habben Jansen: "By merging with CP Ships in 2005 and with CSAV in 2014, we have demonstrated that we are able to combine businesses and integrate them quickly, efficiently and profitably. We are optimistic that we will complete the integration by the end of this year."
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.
The other UASC shareholders are the Kuwait Investment Authority on behalf of the state of Kuwait, the Iraqi Fund for External Development (IFED), the United Arab Emirates and Bahrain, which will be reflected with a combined 3.6 per cent of the shares of Hapag-Lloyd as free float shares.
The ownership structure of Hapag-Lloyd will be CSAV (22.6%), HGV (14.8%), Kuhne Maritime (14.6%), Qatar Holding (14.4%), PIF (10.1%) and TUI (8.9%).