UASC Says Shareholders Back Hapag-Lloyd Merger
The shareholders of Middle East container shipping group United Arab Shipping Company (UASC) back the company's merger talks with German rival Hapag-Lloyd although there has not yet been a vote to approve a deal, UASC said on Thursday.
UASC, which is owned by Gulf governments, said the merger talks were discussed at an extraordinary general meeting (EGM) for shareholders on Thursday at the company's office in Dubai.
"While the shareholders' representatives at the EGM were generally supportive of the ongoing discussions with Hapag-Lloyd and recognized 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 finalized," UASC said in a statement.
If a deal is reached it will create a group with an estimated combined enterprise value of around 7 billion to 8 billion euros ($7.8 bln-$8.9 bln).
UASC said it was continuing discussions with Hapag-Lloyd "to reach an agreement on the envisaged combination, in which case, another EGM of UASC shareholders will then be convened."
At the company's EGM on Thursday, amendments to UASC's Articles of Association, which govern company structure, were approved, the statement said without elaborating.
They were among the first comments on the potential deal from Kuwait-based UASC, owned by Gulf Arab states and in which Qatar holds a majority stake.
Hapag-Lloyd postponed its annual general meeting scheduled for June 1 due to the merger talks with UASC.
Last month Hapag-Lloyd formed a new alliance with five Asian competitors as rivals team up to cut costs in the worst downturn the industry has ever seen.
By linking up through vessel sharing arrangements, shipping lines aim to pool runs to various destinations and save on expenses to boost efficiencies.
Global container shipping is suffering a severe downturn as a combination of weak consumer demand and overcapacity have forced shipping lines to slash costs and try to build scale, including via tie-ups with rivals.
($1 = 0.8963 euros)
(Reporting By Jonathan Saul; Writing By Maha El Dahan; Editing by Susan Fenton and Alexandra Hudson)