The US $8-billion merger between United Arab Shipping Company (UASC) and German shipping line Hapag-Lloyd will create one of the world’s largest shipping lines and its Middle East head office will be based in DIFC.
UASC said it had selected Dubai International Financial Centre, a leading financial hub in the Middle East, last week and DIFC has confirmed the transaction is one of the largest ever mergers involving a DIFC company or any company based in the Middle East region.
With 230 vessels and a combined turnover of approximately US $12 billion, the combined UASC-Hapag-Lloyd will be the fifth-largest shipping line in the world.
UASC had to re-locate to DIFC in order to make the merger legally possible and also utilised a number of innovative SPC and ISPV structures that were made available in the Centre, DIFC said in a statement.
“We are pleased to welcome one of the most established and respected global shipping businesses to DIFC’s business community, particularly at such an exciting time for the company as it announces the completion of its merger with Hapag-Lloyd,” said Arif Amiri, chief executive officer of DIFC Authority.
“The move underlines how DIFC is quickly developing as a domicile of choice thanks to its experience in supporting companies with innovative structured finance transactions,” he added.
“DIFC offers a geographically attractive platform, underpinned by an internationally benchmarked regulatory and legal system, enabling businesses and investors to tap into key emerging markets across the region and thereby supporting the achievement of their respective business objectives,” he said.
DIFC is also home to the recently established Emirates Arbitration Centre, an important piece of legal infrastructure for shipping companies and those using the services of shipping companies in the Middle East.
Jorn Hinge, who led UASC as chief executive officer until the closing, said choosing DIFC as the jurisdiction for UASC in preparation for the merger is testament to UASC’s confidence in the Centre as an important enabler.
” DIFC is an attractive choice in a number of ways, offering a range of benefits, providing access to 100 per cent foreign ownership, zero tax, DIFC law and DIFC infrastructure,” Hinge said.
“This is an important strategic milestone and a big step forward for Hapag-Lloyd,” said Rolf Habben Jansen, chief executive officer of Hapag-Lloyd.
The two shipping lines will now combine 118 Hapag-Lloyd services with the 45 services making up UASC’s network. This process will take until the end of the third quarter. UASC’s 58 vessels will be integrated into the fleet of Hapag-Lloyd. The combined fleet will then include a total of 230 vessels and be one of the youngest in the industry, with an average ship age of only 7.2 years.