The four countries which currently own the United Arab Shipping Company (UASC) have approved an amendment to the company’s rules which would allow it to merge with Hapag-Lloyd.
At an extraordinary general meeting, Qatar, Saudi Arabia, Kuwait and the United Arab Emirates have approved amendments to the company’s articles of association so that they allow for a merger.
While no binding vote was held, as the details of the merger have not been finalised, the decision indicates that UASC’s owners support the merger, at least in theory.
On April 21, the two companies confirmed they were in merger talks and said that negotiations were based on Hapag-Lloyd owning 72% of the combined company and UASC owning 28% of it.
Hapag-Lloyd recently postponed its AGM from June 2016 to August 2016 at the latest so that merger-related amendments to the agenda can be made.
The two companies would have a 7% combined share of global throughput, according to Alphaliner, making them comfortably the fifth biggest shipping line in the world.
The combined entity is like to join ‘THE Alliance’, an alliance of most of the major shipping companies left out of the 2M and Ocean Three alliances.
Mergers and consolidations are the container shipping industry’s response to rock-bottom freight rates caused by weak demand and overcapacity.