Hapag-lloyd and UASC Make History with Landmark Merger

Diana MaureGeneral, News, Ocean FreightLeave a Comment

On Wednesday, May 24th, Hapag-Lloyd and United Arab Shipping Company (UASC) completed a merger that created the fifth-largest container shipping line in the world.

CEO of Hapag-Lloyd Rolf Habben Jansen said, “This is an important strategic milestone and a big step forward for Hapag-Lloyd…Our priority now is a smooth and fast integration of UASC and Hapag-Lloyd.”

The new carrier will now have a strong foothold in the Atlantic, Latin America, and Middle East Markets.

Volume

The new carrier will be a fleet of 230 ships with annual traffic north of 10 million TEUs and a combined capacity of about 1.6 million TEUs. Before the two lines merged, UASC was 18th in total US trade with a share of 1.3 percent – with volume decreasing 1 percent. Hapag-Lloyd took the number four spot in the first quarter and had a market share of 7.5%, with volume rising 8.7% YOY.

Hapag-Lloyd has stated that within two months it will integrate 118 services with 45 services from UASC and they project to be operating as a single network by the end of Q3.

Ships

Hapag-Lloyd said that making significant investments in new ships will not be necessary for the next several years. UASC’s 58 vessels will help to create one of the youngest fleets in the industry – with an average ship age of 7.2 years.

UASC runs 15 mega-ships above 15,000 TEU for a total of 247,146 TEU, while Hapag-Lloyd operates 17 at 204,819 TEU.

Finance

Hapag-Lloyd projects that the merger will result in $435 million of annual synergies – a large percentage of which will be realized in 2018, and the rest in 2019.

Hapag-Lloyd will hold a 72% stake in the new line while the six shareholders of UASC, such as Saudi Arabia’s Public Investment Fund and the Qatar Investment Authority, will own 28%. 14.6% of the company’s shares will be traded on the stock market.

In order to strengthen the company, Hapag-Lloyd is planning a $400 million share issue to improve the company’s financial position.

Photo source: www.hapag-lloyd.com

Diana Maure on EmailDiana Maure on Linkedin
Diana Maure
Recently promoted to Sales Manager, Diana started in 2004 as the Foreign to Foreign Manager for ShipLilly. Her unique background has allowed her to help improve the supply chain of many international clients and provide customized logistical solutions throughout the years.

Leave a Reply

Your email address will not be published.