UASC and Hapag-Lloyd agree merger deal

It's official, UASC and Hapag-Lloyd have finally agreed to the terms of a merger, creating the world's 5th largest shipping line.
A merger between UASC and Hapag-Lloyd will create a shipping group that is the 5th largest in the world and will give Hapag-Lloyd access to bigger ships on the important Asia to Europe trade route.
A merger between UASC and Hapag-Lloyd will create a shipping group that is the 5th largest in the world and will give Hapag-Lloyd access to bigger ships on the important Asia to Europe trade route.

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German container shipping line Hapag-Lloyd AG has agreed a merger deal with United Arab Shipping Company (UASC), creating a group with an estimated value of US $7.7-8.9 billion.

Hapag-Lloyd said its supervisory board had approved the deal, which would see it take all shares in Kuwait-based UASC. Hapag-Lloyd’s anchor shareholders and UASC shareholders still need to give consent and a meeting of UASC shareholders is scheduled for Wednesday.

Hapag-Lloyd shares were up by 3.4 percent on the news. Consolidation in the container shipping sector is seen as a good thing by analysts.

The sector has seen a wave a mergers and acquisitions, particularly in Asia, as companies try to shore up against a critically weak market. The industry is suffering its worst downturn since its origins in the 1950s and 1960s due to a combination of weak consumer demand and overcapacity

Besides full mergers companies are also seeking alliances and vessel sharing arrangements to pool trips and save money.

A merger between UASC and Hapag-Lloyd will create a shipping group that is the 5th largest in the world and will give Hapag-Lloyd access to bigger ships on the important Asia to Europe trade route, while UASC will gain wider access to trans-Atlantic and trans-Pacific loops, where Hapag-Lloyd is strong.

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