Shareholders of UASC have expressed their backing of a potential merger with German carrier Hapag-Lloyd at a recent Extraordinary General Meeting (EGM) in the company’s corporate office in Dubai, despite their being no formal vote on whether the merger should be finalised.
UASC said in a statement: “While the shareholders’ representatives at the EGM were generally supportive of the ongoing discussions with Hapag-Lloyd and recognised the strategic value of a potential combination of both businesses, no formal vote was held today on this topic since the full agreement has not been finalised.”
The shareholders discussed and approved the proposed amendments to the company’s Articles of Association, while recognising the strategic value of a potential combination of both businesses.
UASC and Hapag-Lloyd are continuing their discussions to reach an agreement on the envisaged combination, in which case, another EGM of the UASC shareholders will then be convened.
This comes amid news that UASC was due to hold a meeting with shareholders to determine whether a merger with Hapag Lloyd would be approved, as well as a ‘business cooperation’ agreement.
The idea to merge was first mooted recently in a bid for both lines to be more competitive in a saturated market caused by weak demand, low freight rates and overcapacity.
Hapag-Lloyd has since merged with a number of Asian carriers to form THE Alliance, which aims to take on 2M and the OCEAN Alliance as a competitive shipping alliance.
In other news, HMM’s entry into THE Alliance currently rests on the successful delivery of mega-ships, while UASC’s entry could potentially occur with effective approval.