OOIL, COSCO Deny Deal Rumors
China Cosco Shipping Corporation Limited (Cosco Shipping) and Orient Overseas (International) Limited (OOIL) denied reports that they are in negotiations for Cosco Shipping to take over OOIL subsidiary Orient Overseas Container Line (OOCL).
Rumors about a deal for OOCL have grown over recent months, amid market consolidation and shake-up as the industry struggles to recover from a slump in freight rates linked to a glut of ships and slowing Chinese economic growth, reports Reuters.
OOIL has denied knowledge of any potential bid for its container shipping business OOCL.
Responding to reports in the Wall Street Journal and the Chinese media that Cosco Shipping was readying a bid in excess of $4bn for OOCL, the parent company said in a statement to the Hong Kong Stock Exchange: “The company wishes to clarify that the company and OOCL is not aware of, nor is it involved in any bid relating to the company or OOCL,” MANA correspondent reported.
Meanwhile Reuters quoted a Cosco Shipping spokeswoman as saying the rumours were "incorrect".
A series of mergers and acquisitions in container shipping has left the top six shipping lines controlling 63 percent of the market. OOCL has a 2.7 percent slice of the market, while Evergreen has a 4.8 percent share.
CMA CGM and Evergreen also dismissed the reports.
OOIL’s share price has surged more than 30% since the start of the year.
COSCO is one of the largest shipping lines in the world and owns and operates a fleet of more than 130 vessels.
