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...