Hapag-Lloyd and United Arab Shipping Company (UASC) completed Wednesday a merger between their shipping companies in Hamburg. Hapag-Lloyd is the world’s fifth-largest liner shipping company with 230 vessels and a shared fleet capacity of approximately 1.6 million TEU. Hapag-Lloyd will remain a publicly-listed company registered in Germany with its headquarters in Hamburg. “This is an important strategic milestone and a big step forward for Hapag-Lloyd,” said Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd. “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.”
The business combination agreement (BCA) was signed in Hamburg in July 2016. Since then, around a dozen global competition authorities have had to grant their approval. Changes were also made to the corporate legal structure and the consent of several banks was obtained.
Youngest fleet in industry
The combination of 118 Hapag-Lloyd services with 45 services in UASC’s network are at the centre of integration which will likely start in July and last until the end of September when the new UASC employees have been trained to use the Hapag-Lloyd systems. Then, UASC’s present transport volume will be handled on Hapag-Lloyd’s IT platform. The combined entity will 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 average size of the vessels in Hapag-Lloyd’s new fleet will be some 6,840 TEU/vessel, approximately 30 per cent larger than the average of the top 15 in the industry (5,280 TEU/vessel).
Strengthening Hapag-Lloyd’s position among leading container carriers
Hapag-Lloyd plans to achieve annual synergies of USD 435 million as a result of the merger. Most of these savings should be realized in 2018, while the full amount is expected to first be reached in 2019. In addition to the synergies, the company does not expect to make sizeable investments in new buildings over the next few years. Hapag-Lloyd will establish a new regional headquarters for the Middle East making it the fifth region after North America, Latin America, Asia and Europe.
Hamburg’s Senator for Finance Peter Tschentscher, commented: “The completed fusion of these two shipping companies is another important step towards strengthening Hapag-Lloyd’s international competitive position. The traditional Hamburg shipping company gets access to the next generation of very large, efficient container ships without having to purchase them itself. The fusion will help secure Hapag-Lloyd’s position among the leading worldwide operating container carriers.”