HAMBURG: Hapag Lloyd is close to completing a merger with United Arab Shipping Company (UASC) after UASC's shareholders agreed terms to repay outstanding debts according to the sources.
The deal to create the world's fifth-biggest shipping company, valued at about 7 billion to 8 billion euros ($7.8-$8.9 billion), would give Hapag Lloyd access to bigger ships on the major Asia to Europe trade route.
In fact Hapag Lloyd and Gulf-based banks involved in the talks demanded that UASC shareholders garner more funds to help the combined company through an unprecedented downturn in the container shipping industry, according to people familiar with the talks.
One said the Qatar Investment Authority (QIA) had offered the necessary assurances over its stake. Both added that syndicate banks had begun to receive the shareholder funds, clearing the way for formal completion.
A spokesman for Hapag Lloyd confirmed that the transaction was expected to close by the end of May as the parties worked through final financial details of the combination.