Dubai-based container shipping firm United Arab Shipping Company S.A.G. (UASC) informed that all six of its shareholding states voted unanimously to approve the proposed merger with German shipping major Hapag-Lloyd AG on Wednesday.
During an Extraordinary General Meeting (EGM), the shareholding states nodded to the merger with a relative valuation of the two businesses at 72% for Hapag-Lloyd’s shareholders and 28% for UASC’s shareholders.
“Several legal and administrative tasks need to be completed before the binding agreement can be formally signed,” UASC said.
The company added that the parties will now initiate the requests for the necessary regulatory approvals, and until then, both companies will continue to operate as independent, stand-alone companies.
Once the regulatory approvals are received, the integration of some activities are expected to begin, however, the companies will still continue to operate in their current alliances until the end of March 2017.
The shipping giants reached an agreement on the terms and conditions of a Business Combination Agreement (BCA), which would create the fourth biggest container shipping group in the world, earlier this week.
The move is said 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.