Hapag-Lloyd and UASC Complete Merger

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Hapag-Lloyd and United Arab Shipping Company have completed their merger to become one combined company.

The German ocean carrier line has now secured its place as the fifth biggest worldwide.

Both companies will now run independently while working to integrate internal systems and processes as quickly as possible.

Hapag-Lloyd also plans to extend its global network into the Middle East.

In an announcement to its customers, Hapag-Lloyd said that the combined company now boasts a “larger, more efficient, and environmentally friendly fleet of vessels”.

It also revealed plans to deploy the most effective vessel class in each of the trade lanes.

The first UASC services will be transferred to Hapag-Lloyd from mid-July, followed by the remaining services over several weeks.

It hasn't been plain sailing as the complexity of the deal, valued at US$7.6 to $8.7 billion, meant it had to be halted at the end of April this year due to assurances being required from UASC's top shareholder Qatar.

Hapag-Lloyd now expects to generate annual savings of US$435 million from 2019 onwards, with a large proportion of this already to be achieved in 2018.

Profits will be vital to the success of the merger as Hapag Lloyd recently announced that its Q1 2017 net loss increased by over a third on last year’s results.

UASC is now an official part of THE Alliance, launched on April 1, 2017, which includes NYK Line, MOL, K Line, and Yang Ming Line.

It will be up against strong opposition in the sector from alliances 2M, led by Maersk Line and Mediterranean Shipping Company (MSC), and Ocean Alliance — the largest grouping of them all.

In a recent PTI poll, voters considered that THE Alliance would be the third strongest grouping of carrier lines by the end of this year.

“Ensuring a smooth transition for you is our top priority,” said Hapag-Lloyd in a statement to its customers.

It added: “With two large, successful mergers in recent years, we have an industry-leading track record for conducting integrations rapidly and efficiently – and are confident of achieving this goal again.

“Your feedback is important to help us safeguard a continued successful relationship now and in the future.”

Thorsten Haeser, Hapag-Lloyd's CCO, also released a video message for customers through the company's YouTube channel:

 

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