UASC owners approve Hapag-Lloyd merger 'in theory'
The majority owners of United Arab Shipping Company (UASC) have approved an amendment to the company’s rules, paving the way for a merger with German shipping line Hapag-Lloyd.
UASC is owned by state entities in Qatar, Saudi Arabia, Kuwait and the United Arab Emirates and all four have approved amendments to the company’s articles of association allowing for a merger with the European shipping giant.
The details of the merger have not been finalised and the deal has not yet received formal approval from UASC’s shareholders, but the decision to alter the articles of association indicates that UASC’s owners support the merger in theory.
UASC and Hapag-Lloyd confirmed in April that they were in merger talks and said that negotiations were based on Hapag-Lloyd owning 72% of the combined company and UASC owning 28% of it. The shipping conglomerate would have a 7% combined share of global container throughput, according to Alphaliner.
The company would be the fifth largest of its kind in the world and is expected to join ‘THE Alliance’, an alliance of most of the major shipping companies left out of the 2M and Ocean Three alliances.
Analysts have said that mergers and consolidations are likely to increase in the coming months as the container shipping industry adjusts to critically weak freight rates caused by weak demand and overcapacity.