Germany’s Hapag-Lloyd has agreed merger terms with United Arab Shipping Company, a Middle Eastern enterprise, as shipping lines consolidate amid a drop in freight rates.
The merger talks between the two companies began in April.
“Hapag-Lloyd and UASC have reached an agreement on the terms and conditions of a business combination agreement (BCA) providing for the contribution of all shares in UASC to Hapag-Lloyd,” the German shipper said in a statement on Tuesday.
The supervisory board approved the agreement, but the conclusion of the merger is contingent on receiving shareholder approval from both companies.
UASC shareholders are to meet on Wednesday, at an extraordinary general meeting to grant their approval, the statement said.
Hapag-Lloyd is publicly listed, while UASC is privately owned.
Hapag-Lloyd, which has a fleet of 175 vessels, swung to a first-quarter loss of €42.8 million (Dh173.9m), compared with a €128.2m gain in the same period a year earlier, because of a 20 per cent year-on-year drop in freight rates that cancelled out cost cuts.
The merger is part of a consolidation wave in the industry, which is suffering from low rates and shipping overcapacity as trade flows stagnate.
Growth in the volume of world trade is forecast by the World Trade Organisation to remain low this year at 2.8 per cent, unchanged from the 2.8 per cent increase recorded last year.
This year is projected to be the fifth in a row of trade growth below 3 per cent.
dalsaadi@thenational.ae
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How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
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