Hapag-Lloyd’s merger with United Arab Shipping Company (UASC), which is owned by six Gulf states, will proceed as planned, despite the diplomatic rift between Qatar and its neighbours, according to a report.
No indication of merger hurdles:
The report cites a source at the German shipping line as saying that there was no indication at present that the situation would affect the merger, which was finalised last month with Qatar holding 14 percent and Saudi Arabia 10 percent of the merged company.
Both are also represented on the supervisory board of what is now the world’s fifth biggest container shipping line, but Saudi Arabia and the United Arab Emirates have both cut trade and diplomatic ties with Qatar in a major regional political dispute.
Complete integration to be ensured:
“We are confident that we will be able to ensure complete integration by fourth quarter 2017,” Hapag-Lloyd said in a letter to shareholders, which maps out a timeline up to October.
Given the work that still needs to be done, it is difficult to see how this can be accomplished if the regional political situation remains unchanged.
Inclusion of UASC transport volumes:
The next steps in the merger involve the inclusion of UASC’s transport volumes on Hapag-Lloyd’s IT platform, which is unaffected by the Qatar dispute, but the establishment of new headquarters for the Middle East region as well as staff relocations will be almost impossible.
Dubai is the natural choice for the regional HQ, but the UAE government has barred Emirates-based businesses from doing business with Qatar.
Hapag-Lloyd did not respond to a request for comment.
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Source: Reuters
