Shareholders’ representatives of the United Arab Shipping Company (UASC) supported the ongoing discussions with German counterpart Hapag-Lloyd at an Extraordinary General Meeting (EGM) held on June 2nd.
However, even though they recognized the strategic value of a potential combination of both businesses, no formal vote was held on the topic since the full agreement has not been finalized, UASC said in a statement.
“UASC and Hapag-Lloyd are continuing their discussions to reach an agreement on the envisaged combination, in which case, another EGM of the UASC shareholders will then be convened,” the statement reads.
The talks between HL and UASC regarding a potential combination of their respective container shipping operations were confirmed in April. According to HL, the parties are basing their discussions on a relative valuation of the two businesses at 72% (HL) and 28% (UASC).
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.
Hapag-Lloyd has already partnered up with some of the major carriers in what is dubbed as the third carrier alliance, The Alliance, set to enter the market in 2017. These include Hanjin, “K”Line, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Yang Ming.
UASC is anticipated to become part of The Alliance once the merger talks are concluded.