Report: COSCO, CSG About to Disclose Merger Details

The merger deal between China’s two shipping giants China Shipping Group and China Ocean Shipping Group has received clearance from the State Council, Chinese magazine Caixin reports citing sources familiar with the matter.

The details of the merger that would create the world’s fourth largest container operator are expected to be announced today.

The merger is believed to include among other things the companies’ respective port operation businesses, commodities shipping and tanker divisions as the country strives to consolidate its oversupplied shipping market.

According to the Wall Street Journal, the merger, should it be limited to container shipping operations could reach the value of up to USD 20 billion, whereas a wider-scope merger of all assets could reach the value of up to USD 80 billion.

Earlier this month COSCO said in a stock exchange filing that the suspension of trading of its stocks should be over in January.

The trading has been suspended in anticipation of a major announcement on the company’s asset restructuring, which is believed to be connected to a merger with its compatriot China Shipping Group (CSG).

The announcement was further substantiated by a stock exchange filling from CSG’s subsidiary, China Shipping Development, which said that the suspension of trading of its parent’s stocks was to continue into January. As disclosed, the unfreezing would coincide with COSCO’s deadline, namely two months after November 10.

The government of China has reportedly ordered the merger of two of the country’s largest state-owned shipping companies at the beginning of August.

Following the announcement, both Cosco  and China Shipping Group, and their respective subsidiaries, suspended trading from stock exchanges in anticipation of a “major announcement.”

World Maritime News Staff

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