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Hapag Lloyd takeover of UASC runs into problems, say reports

Hapag Lloyd takeover of UASC runs into problems, say reports
The mooted merger between Hapag Lloyd and United Arab Shipping Company (UASC) has apparently run into problems due to worries over the commitment of Qatar Investment Authority, UASC’s top shareholder.

A report from news agency Reuters said that the German shipping line and a number of banks are seeking assurances that Qatar will remain committed to UASC in the long-term.

Two finance sources told the news agency that one of the main concerns of Hapag Lloyd and some of the Gulf-based syndicate banks is that Qatar could in future lower its stake in the combined group.

The apparent worry is that rival container shipping lines could acquire a stake in the merged group if Qatar sells shares, one of the sources said.

The news comes less than two weeks after Hapag-Lloyd postponed the completion date of its takeover from 31 March to 31 May, but insisted the deal was not in doubt.

Hapag Lloyd chief executive Rolf Habben Jansen told a news conference this week he had underestimated the complexity of the EUR7bn - 8bn deal, which will create one of the world's largest shipping lines.

Currently, Qatar holds a 51% stake in UASC, Saudi Arabia has 35% and the rest is owned by United Arab Emirates, Bahrain, Kuwait and Iraq.

Under the terms of the new structure, Qatar will hold 14% in the merged group via QIA's subsidiary Qatar Holding LLC, while Saudi Arabia will have a 10% stake.

Another factor said to be holding up the deal is the proposed sale of shipping company United Arab Chemical Carriers, which is necessary under the terms of the merger.