Hapag-Lloyd and the United Arab Shipping Company S.A.G (UASC) have agreed on a contract for a merger, the Hamburg-based company announced after the supervisory board of Hapag-Lloyd agreed to the deal on Tuesday (June 28th). Approval of the legally binding contracts by UASC’s shareholders is pending. An extraordinary shareholders meeting will be held Wednesday in Dubai.
Fleets with over 620 ships
Hapag-Lloyd now ranks sixth in the top 100 league of the world’s biggest container shipping companies and is expected to move up to fifth position once the merger has been approved by UASC’s shareholders. UASC is currently in eleventh place. In May, Hapag-Lloyd announced a partnership alliance with five Asian shipping companies. Under the partnership, which is due to start in April 2017, the shipping companies would jointly operate over 620 ships.
Falling prices and increased capacities
In view of falling freight prices in international container shipping, big fleets and high container capacities are crucial to the survival of shipping companies. In 2014, Hapag-Lloyd merged with the container branch of Chile’s CSAV. Together with UASC, Hapag-Lloyd now has around 230 ships with a capacity of 1.5 million standard containers (TEU), according to the rankings.
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