China’s Cosco Shipping Holdings Co received the clearance of a U.S. national-security review body, removing a major overhang of the USD 6.3 billion deal of taking over Orient Overseas International Ltd (OOCL).
According to a Reuters' report, the U.S. Committee on Foreign Investment in the United States had notified it that it does not have any outstanding security issues following an agreement with the U.S. government to divest the Long Beach container terminal business to a third party.
Cosco said the U.S. regulator has cleared its planned takeover of the Hong Kong-based container shipping operator, after Cosco agreed to place a large container terminal in Long Beach, Calif., into a U.S.-run trust and put it up for sale.
China's state-run Cosco said ownership of the container terminal business will be transferred to a trust while a buyer is sought.
Cosco’s acquisition of OOIL is part of a sweeping consolidation within the industry that has struggled with overcapacity, a plunge in freight rates and widening losses.
Cosco said on June 30 that all pre-conditions for the OOIL offer made last year had been met after receiving approval by the Chinese anti-monopoly regulator. It already has approvals from European and United States anti-monopoly regulators.
Closing of the offer is now subject to the Conditions being fulfilled. When everything is final, Cosco will hold 90.1% of Orient Overseas.
The deal had won a nod from China’s Anti-Monopoly Bureau about a week ago, removing the final obstacles to the creation of a container line that would become the world’s No. 3 by capacity after A.P. Moller-Maersk A/S and Mediterranean Shipping Co.