German container shipping giant Hapag-Lloyd said it had signed a merger deal with the United Arab Shipping Company to create the world's fifth-largest container firm.
"Hapag-Lloyd and United Arab Shipping Company (UASC) have signed a business combination agreement to merge both companies, subject to the necessary regulatory and contractual approvals," the firm said in a statement.
No financial details of the deal were disclosed.
"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 the German firm's chief executive Habben Jansen.
Once UASC's ships are integrated into the fleet, Hapag-Lloyd will have 237 ships afloat with a total capacity of 1.6 million TEU (twenty-foot equivalent units, which is the standard measure of a container).
It is expected to transport around 10 million TEU to destinations around the world each year.
The combined firm will remain listed on the German stock exchange and retain Hapag-Lloyd's HQ in northern port city Hamburg.
UASC's majority shareholders, Qatar Holding and the Public Investment Fund of Saudi Arabia, will take stakes of 14% and 10% in the merged company.
CSAV, the city of Hamburg and Kuehne Maritime will remain the largest shareholders in Hapag-Lloyd.
Managers at the two logistics companies expect the merger to be completed by the end of 2016 once they receive regulatory approval.
Hapag-Lloyd comes to the UASC deal off the back of a successful purchase of Chilean firm CSAV's container shipping arm and its own stock market flotation, both in 2015.
