European Commission approved Hapag-Lloyd and UASC merger

Hapag-LloydThe European Commission approved the merger of Hapag-Lloyd and United Arab Shipping Company, but put some conditions to the carriers in attempt to keep the market competition. One of the conditions is that container carrier UASC is obliged to quit cancel services linking Northern Europe and North America, where the competition is not strong enough and merger might lead to monopoly pricing influence. The capacity of the fleet under the control of the consolidated company will be about 1.6 million TEU, which will provide it in the order of 7% market share and fifth in the global ranking of container lines.

“The commitments made by Hapag-Lloyd in connection with the merger with UASC, guarantee that the transaction will not lead to higher prices on the routes between northern Europe and North America”, said the European Commissioner for competition, Margrethe Vestager.

The new merged container shipping carrier will join the alliance THE Alliance, which will also include Hanjin Shipping, Hapag-Lloyd, K Line, MOL, NYK Line and Yang Ming Line.

As Maritime Herald already released, Hapag-Lloyd and United Arab Shipping Company confirmed the merger talks and explained that the talks were based on its shareholders owning 72% of the combined business and UASC’s shareholders the remaining 28%. The new container shipping carrier will have market capitalization of 9 billion USD.