Chinese transport giant China Merchants Group looks set to takeover Sinotrans & CSC in the potential merger between the two shipping giants in China, reports Reuters.
The two companies have been locked in reorganization talks, financial magazine Caixin
said, citing sources close to China Merchants.
Officials from both companies declined to comment on the talks when contacted by Reuters on Tuesday.
Sinotrans & CSC Holdings have announced that the parent group is undergoing strategic restructuring, adding to speculation that a tie-up between the conglomerate and its state-owned peer China Merchants Group is imminent.
Sinotrans Shipping, the giant’s bulker and containership arm, said in an exchange filing that it has received a notice from the parent company, which stated that “Sinotrans & CSC is preparing for a strategic reorganisation.
A potential merger between Sinotrans & CSC and China Merchants shouldn’t be seen as beyond reason in spite of the sprawling scale and seeming overlap between the two state-owned companies, according to Zhao Huxiang, chairman of Sinotrans & CSC, who speculated publically on the concept at a press briefing Tuesday.
The move comes as the Chinese government is encouraging restructuring and mergers among state-owned enterprises. The domestic shipping industry's two largest firms, China Ocean Shipping (Group) Company and China Shipping Group, are also in talks to merge, a source told Reuters in August.