DEAL: Hapag-Lloyd/United Arab Shipping Co merger

Author: Lizzie Meager | Published: 31 May 2017

The recently completed merger of Hapag-Lloyd and the United Arab Shipping Company (UASC) provides a blueprint for future M&A transactions in the shipping container industry.

The $14 billion deal was complicated by UASC’s legal status as a supranational company, established 40 years ago by treaty and owned by six sovereign states in the Gulf. UASC’s majority shareholders include the Qatar Investment Authority (QIA) and Saudi Arabia’s Public Investment Fund (PIF). Meanwhile Hapag-Lloyd, which has been on a broader consolidation drive in recent years as the shipping industry faces an ongoing economic crisis, is a public company listed in Hamburg.

The industry has been hit by a severe mismatch of supply and demandA 49% cap on foreign ownership in the UAE, where UASC is based, would have prevented the deal from taking place. To get around this lawyers chose to re-domicile UASC within the Dubai International...