German container shipping company Hapag-Lloyd agrees to merge with CSAV

German container shipping giant Hapag-Lloyd signed a merging agreement with its Chilean peer Compania Sud Americana de Vapores (CSAV) on Wednesday to form the world's fourth biggest container shipping line. The merge, waiting for the approval of authorities, would equipped "the new Hapag-Lloyd" with a fleet of some 200 vessels with total transport capacity of around one million twenty-foot containers (TEU), said the Hamburg-based Hapag-Lloyd in a statement. With the help of CASV's strong position in the north-south traffic, the new company would have an annual transport volume of 7.5 million TEU, and an annual turnover of 9 billion euros (about 12.4 billion U.S. dollars), it said. In return for contributing its container business, CSAV would hold 30 percent stake in the combined entity, and its share would be increased to 34 percent following an agreed capital increase of 370 million euros, among which 259 million would be contributed by CSAV. "By integrating CSAV's container business, Hapag-Lloyd is able to build on its strengths and is therefore in an excellent position for future growth," said Michael Behrendt, Hapag-Lloyd's Executive Board Chairman, calling the day "an important milestone" in the history of his company. Maersk Line in Denmark, the leading player in the container shipping industry, announced last month that an alliance of the world's three biggest container shipping lines, another two being Switzerland-based Mediterranean Shipping Company and CMA CGM of France, was likely to start operating in mid-2014. The alliance, dubbed P3, would pool more than 250 vessels on trade routes of Asia-Europe, trans-Pacific and trans-Atlantic in an effort to save their cost. Once completed, the alliance was estimated to dominate more than 40 percent shares of Asia-Europe and trans-Pacific routes, and 24 percent of trans-Atlantic business.