Germany-based shipping company Hapag-Lloyd announced that it completed the integration of United Arab Shipping Company (UASC) into the Group, six months after the merger process started. Hapag-Lloyd merged with UASC on 24 May 2017, after a business combination agreement (BCA) signed in July 2016.
“Thanks to the very good cooperation of our teams we have managed to successfully implement this integration in just six months. In the process, our extensive experience from earlier mergers – such as with CP Ships in 2005 and with CSAV in 2014 – helped us a lot,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG, at a gathering of the shipping company’s global management in Hamburg.
With more than 12,000 employees in five sales regions and 126 countries, as well as a fleet of 215 modern container ships, Hapag-Lloyd is now the fifth-largest liner shipping company in the world.
The two majority shareholders of UASC, Qatar Investment Authority, through its subsidiary Qatar Holding LLC, and the Public Investment Fund of the Kingdom of Saudi Arabia (PIF), will become new key shareholders of the German company.
Beginning in 2019, Hapag-Lloyd expects annual synergies of USD 435 million as a result of the merger with UASC.
“Already in 2018, we will benefit from the merger of the two shipping companies due to significant cost reductions,” Mr. Habben Jansen added.
The company is also expected to be a key player in “THE Alliance” – consisting of Hanjin, Hapag-Lloyd, K-Line, Mitsui O.S.K Lines, Nippon Yusen Kaisha and Yang Ming, covering all East-West trade lanes including Asia-Middle East/Arabian Gulf and Red Sea.
The shipping business integration strategy has been seen a lot in recent years, from Maersk’s acquisition of Hamburg Sud to MOL’s, K Line’s and NYK’s merger of container operations, as a result from global economic downturn.