Cosco, China Shipping Mega Merger Deal May Get Green Signal Soon
The merger deal of China’s two shipping gianst China Ocean Shipping Co., or Cosco, and China Shipping Group that could create the world’s fourth largest container operator is expected to get approval by Chinese government by January, reports WSJ.
The companies have been working out a deal for months, centered on combining the two companies’ container-shipping units. They are also looking into merging tanker, dry-bulk and port operations, the people said.
The tie-up is part of Beijing’s strategy to consolidate state behemoths in many industries so they compete effectively with international peers. In creating a global shipping giant, a merger could also touch off consolidation in the highly fragmented world of container shipping.
Cosco Container Lines operates 175 container vessels and CSCL operates 156, making them the world’s sixth- and seventh-largest container companies in terms of capacity, with a combined global container capacity share of around 8%.
The merged entity would become the world’s fourth-largest container company, behind the Maersk Line unit of Denmark’s A.P. Møller-Mærsk A/S, Geneva-based Mediterranean Shipping Co. and France’s CMA CGM SA.
