FRANKFURT: German container shipping giant Hapag-Lloyd said on Monday it had signed a merger deal with the United Arab Shipping Company to create the world's fifth-largest container firm.
"Hapag-Lloyd AG and United Arab Shipping Company (UASC) have signed a Business Combination Agreement to merge both companies, subject to the necessary regulatory and contractual approvals," the firm said in a statement.
No financial details were disclosed.
"This strategic merger makes a lot of sense for both carriers -- as we are able to combine UASC's emerging global presence and young and highly efficient fleet with Hapag-Lloyd's broad, diversified market coverage and strong customer base," said the German firm's chief executive Habben Jansen.
Once UASC's ships are integrated into the fleet, Hapag-Lloyd will have 237 ships afloat with a total capacity of 1.6 million TEU (twenty-foot equivalent units, which is the standard measure of a container), expected to transport around 10 million TEU to destinations around the world each year.
The combined firm will remain listed on the German stock exchange and retain Hapag-Lloyd's HQ in northern port city Hamburg.
UASC's majority shareholders, Qatar Holding LLC and the Public Investment Fund of Saudi Arabia, will take stakes of 14 percent and 10 percent in the merged company.
CSAV, the city of Hamburg and Kuehne Maritime will remain the largest shareholders in Hapag-Lloyd.
Managers at the two logistics companies expect the merger to be completed by the end of 2016 once they receive regulatory approval.
Hapag-Lloyd comes to the UASC deal off the back of a successful purchase of Chilean firm CSAV's container shipping arm and its own stock market flotation, both in 2015.
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