German container shipping line Hapag-Lloyd is set to secure EU antitrust approval for its merger with United Arab Shipping Company (UASC) after the latter agreed to pull out from some vessel sharing agreements, two people familiar with the matter said on Tuesday.
The combined company, valued at about 7 to 8 billion euros ($7.5-$8.6 billion), would be the world’s fifth largest shipping company, with access to the Asia to Europe trade route and trans-Atlantic and trans-Pacific routes.
The shipping companies offered the concessions last month in a bid to fend of the European Commission’s concerns but did not provide details. Kuwait-based UASC is owned by Gulf Arab states with Qatar holding a majority stake.
Commission spokesman Ricardo Cardoso declined to comment.
“We don’t know anything about this, this is completely new information to us,” Hapag-Lloyd spokesman Nils Haupt said after consulting with the company’s lawyers. UASC was not immediately reachable outside office hours.
The container shipping industry has seen a series of mergers in recent years as companies combine their forces to deal with the worst slump in five decades caused by over-capacity and weak global economic growth.
Companies are also seeking alliances to pool trips and save costs. Hapag-Lloyd in May announced a new alliance with five Asian competitors.