China's Leading Shipowners to Merge
China Ocean Shipping Group (COSCO) and China Shipping Group are planning a merger, on government orders.
Local media reports indicate that Beijing ordered the two state-run companies to come up with a roadmap to merge on Thursday. The plans are expected to be ready within three months.
Together, mainland China’s two largest shipping and logistics companies control 11 listed companies in Shanghai, Shenzhen, Hong Kong and Singapore.
These include China Cosco Holdings with container and dry bulk fleets, China Shipping Development (CSD) with dry bulk and tanker fleets and China Shipping Container Lines (CSCL), a purely container ship entity.
COSCO and CSCL rank as the world’s sixth and seventh largest carriers respectively by fleet size according to Alphaliner. COSCO is a member of the CKYHE alliance, whereas CSCL has a pact with CMA CGM and United Arab Shipping.
Combing their fleets will give rise to the world’s fourth-biggest container line, although the move may raise anti-trust issues in some jurisdictions.
A share trading halt for COSCO and China Shipping Group came into effect on Monday.