The European Commission (EC) has granted a conditional approval to the proposed merger between German container shipping line Hapag-Lloyd and United Arab Emirates’ (UAE) United Arab Shipping Company (UASC).

The condition includes UASC’s withdrawal from a consortium on the trade routes between Northern Europe and North America, NEU1, where the merged entity would have faced insufficient competitive constraint.

However, Hapag-Lloyd has proposed to terminate UASC’s participation in the NEU1 consortium.

"European companies rely on container liner shipping services for their transatlantic shipments."

European Commission competition policy commissioner Margrethe Vestager said: "European companies rely on container liner shipping services for their transatlantic shipments.

“It's very important that the markets remain open.

“The commitments offered by Hapag-Lloyd ensure that the takeover will not lead to price increases on the routes between Northern Europe and North America."

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In July, Hapag-Lloyd and UASC entered into a business combination agreement (BCA) to merge both the companies.

Once merged, the combined company will be the world’s fifth largest liner shipping line and will operate 237 vessels with total transport capacity of around 1.6 million twenty foot equivalent unit (TEU).

The merged entity, which will be headquartered in Germany, will have an annual transport volume of ten million TEU and a combined turnover of around $12bn.

In addition, Hapag-Lloyd’s current controlling shareholders, CSAV Germany Container Holding, HGV Hamburger and Kühne Maritime will continue to remain in their position.

The majority shareholders of UASC, Qatar Holding (QH) and Public Investment Fund of Saudi Arabia (PIF), will become new key shareholders of Hapag-Lloyd holding 14% (QH) and 10% (PIF) respectively.