Hapag-Lloyd and United Arab Shipping Company have signed an agreement to merge the two shipping lines.

“This strategic merger makes a lot of sense for both carriers – as we are able to combine UASC’s emerging global presence and young and highly efficient fleet with Hapag-Lloyd’s broad, diversified market coverage and strong customer base,” said Rolf Habben Jansen, CEO of Hapag-Lloyd. “Furthermore it will give the new Hapag-Lloyd access to ultra-large container vessels. After the successful integration of CSAV, which was concluded mid of 2015, this transaction with UASC is another historic milestone for Hapag-Lloyd. The merger reinforces our position as a top five and one of the largest truly global carriers in liner shipping.”

According to the German shipping line, the new Hapag-Lloyd will have 237 vessels with a total capacity of about 1.6 million TEUs, a transport volume of 10 million TEUs per year and a combined turnover of approximately US$12 billion.

Hapag-Lloyd will also set up a fifth regional centre in Dubai to take advantage of UASC’s presence in the Middle Eastern market.

“With this merger, we are embarking on an exciting new phase of UASC´s growth,” said Jorn Hinge, president and CEO of UASC. “Leveraging on UASC’s heritage in the Middle East as well as our recent growth in other markets, the combined company will provide customers with valuable expertise and very efficient service offerings in all major trade lanes and markets around the world.”

Hapag-Lloyd will be part of THE Alliance, announced in May 2016, together with Hanjin Shipping, “K” Line, Mitsui O.S.K. Lines, Nippon Yusen Kaisha Line and Yang Ming, with operations to begin in April 2017.

The merger is expected to be completed by the end of 2016, according to Hapag-Lloyd.