German shipping major Hapag-Lloyd is said to be in talks with United Arab Shipping Company (UASC) on a potential merger of operations.

The report on the merger has emerged in German media, however World Maritime News also received a confirmation from a source close to the matter.

The merger, if concluded, would create the fourth biggest container shipping group in the world. The move would also provide the German company access to some of the biggest containerships plying the international waters today, as UASC has six 18,800 TEU ships being built at Hyundai Heavy Industries, headed by Barzan, the container shipping industry’s first LNG-ready ultra-large container vessel already delivered.

The move is said to be driven by the ever growing need for consolidation within the container shipping industry amid fleet oversupply that has pushed rates to the rock bottom.

Hapag-Lloyd has returned to the black in 2015 mainly due to the merger with the Chilean Compañía Sud Americana de Vapores (CSAV) in December 2014.

The merged company has around 200 vessels with a total capacity of approximately one million TEU, transporting some 7.5 million TEU every year.

Hapag-Loyd is expected to issue a statement on the matter today.

“We don’t have an update on this now, will make sure that you get an update/statement from UASC’s side whenever there is one,” UASC said in a reply to World Maritime News’ requests seeking comment.

Previously, Hapag-Lloyd said that it would always be a driver of consolidation and that it would only act if and when opportunities for such moves emerge.

The report on the merger has seen German company’s shares rise 13 percent to trade at 18.45 euros as of 12:11 a.m. in Frankfurt, Bloomberg reports.

World Maritime News Staff