Hapag-Lloyd UASC Merger to Get EU Approval Soon

 

The planned tie-up, which would create the world’s fifth-largest carrier is one step closer to becoming a reality after sources close to the deal told Reuters that UASC had agreed to pull out of some vessel sharing agreements, seen as a key stumbling block in gaining approval.

 

The combined company, valued at about 7 to 8 billion euros ($7.5-$8.6 billion), would be the world's fifth largest shipping company, with access to the Asia to Europe trade route and trans-Atlantic and trans-Pacific routes.

 

The shipping companies offered the concessions last month in a bid to fend of the European Commission's concerns but did not provide details. Kuwait-based UASC is owned by Gulf Arab states with Qatar holding a majority stake.

 

Commission spokesman Ricardo Cardoso declined to comment.

 

"We don't know anything about this, this is completely new information to us," Hapag-Lloyd spokesman Nils Haupt said after consulting with the company's lawyers. UASC was not immediately reachable outside office hours.

 

The container shipping industry has seen a series of mergers in recent years as companies combine their forces to deal with the worst slump in five decades caused by over-capacity and weak global economic growth.

 

Companies are also seeking alliances to pool trips and save costs. Hapag-Lloyd in May announced a new alliance with five Asian competitors.