Hapag-Lloyd and United Arab Shipping Company have completed their merger, creating the fifth-largest shipping line in the world.
“This is an important strategic milestone and a big step forward for Hapag-Lloyd,” said Rolf Habben Jansen, chief executive officer of Hapag-Lloyd. “We now not only have a very strong market position in Latin America and the Atlantic, but also in the Middle East, where we will become one of the leading carriers. Our priority now is a smooth and fast integration of UASC and Hapag-Lloyd.”
Hapag-Lloyd now operates a fleet of 230 vessels with a total capacity of approximately 1.6 million TEUs. The average size will be about 6,480 TEUs per vessels, while the average ship age is 7.2 years.
The combination of Hapag-Lloyd’s 118 services with UASC’s 45 will begin in roughly eight weeks’ time and will take until the end of the third quarter, after UASC employees have been trained to use Hapag-Lloyd’s systems.
A new regional headquarters for the Middle East region will be set up, adding to Hapag-Lloyd’s regional headquarters in North America, Latin America, Asia and Europe.
“Hapag-Lloyd has long-term and extensive know-how when it comes to acquisitions,” said Habben Jansen. “By merging with the Canadian shipping company CP Ships in 2005 and, more recently, with CSAV in 2014, we have demonstrated that we are able to combine businesses and integrate them quickly, efficiently and profitably. We are optimistic that we will be able to complete the integration of UASC by the end of this year.”
Hapag-Lloyd expects annual synergies of US$435 million as a result of the merger. A significant portion of the savings is expected to be realized in the course of 2018, while the full amount is expected to first be reached in 2019.
The two shipping lines signed a business combination agreement in Hamburg in July 2016, after which the approval of approximately a dozen competition authorities across the world had to be obtained, according to Hapag-Lloyd.