Green Signal for Sinotrans-China Merchants Merger
China's cabinet on Tuesday (Dec 29) approved a deal that fuses two of the country's biggest state-owned transport and logistics firms, reports Reuters.
China's cabinet has approved China Merchants Group's acquisition of Sinotrans & CSC Holdings Co, the state asset regulator said on Tuesday.
Previously directly supervised by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), Sinotrans & CSC Holdings is the biggest integrated logistics service provider with total asset of well over 100 billion yuan (16 billion U.S. dollars).
Based in Hong Kong, China Merchants Group is a state-owned conglomerate with businesses in transportation, finance and real estate. By the end of 2014, its total asset stood at 624 billion (US$96 billion) yuan.
The merger aims to create economies of scale and synergies between the companies in logistics, energy and dry bulk shipping, property development, ports and marine and offshore engineering.
The reorganisation aims to achieve economies of scale and synergies in particular in the areas of logistics, energy and bulk shipping, property development, ports and marine and offshore engineering between the two groups to speed up the development of an internationally competitive leading enterprise,” Sinotrans said.
Earlier in December, China's cabinet approved the merger of the two biggest state-backed shipping conglomerates, China Ocean Shipping (Group) Co (COSCO) and China Shipping Group Co.