Hapag-Lloyd AG (HL) and United Arab Shipping Company SAG (UASC) are currently discussing forms of cooperation including a potential combination of their mutual container shipping operations, German shipping company confirmed.
“In case of a business combination, the parties are basing their discussions on a relative valuation of the two businesses at 72% (HL) and 28% (UASC),” Hapag-Lloyd said in a press release.
The confirmation follows a report that first emerged in German media and soon after the rumor hit the headlines across the world.
The company also added that the merger would be subject to a mutually satisfactory completion of the negotiations and the mutual due diligence exercise.
To date, the discussions conducted between the two carriers have not resulted in any binding agreement and no assurance can be given that these discussions will lead to a definitive agreement, Hapag-Lloyd said.
Speaking to World Maritime News, the company’s spokesperson said that it was still early to discuss what regulatory bodies would have to approve the merger should a binding agreement be made.
The move is believed 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 said that it was always its intention to be a driver of consolidation and that it would only act if and when opportunities for such moves emerge, as was the case with this opportunity.