After Six Years, CSSC Completes its Megamerger With CSIC

 

After years of preparation, the megamerger of Chinese shipbuilding giants CSSC and CSIC has finally been completed. Though the two enterprises have both been under CSSC's control since 2019, they retained their independent stock listings - until Thursday, when an exchange filing completed the integration of CSIC into CSSC. 

At the market close on Thursday, CSIC shareholders received 0.13 shares of CSSC for every share they owned. CSIC's stock will be delisted from the Shanghai Exchange on Friday. After that point, it will be dissolved as a legal entity, and all of its assets and obligations will be assumed by CSSC. The company's hope is that it will be able to better integrate its shipyard assembly operations, improve its purchasing power, achieve as-yet-unrealized synergies from the union of the two companies, and "regulate competition within the same industry."d

As a group, CSSC and CSIC were already the world's largest shipbuilding conglomerate. Now with a unified brand, the merger confirms CSSC as the biggest shipbuilder by assets, revenue and order backlog. In 2024, CSSC-operated yards built more tonnage than the entire production of the U.S. shipbuilding industry since 1945. 

The merger is a reunion, and it brings CSSC back full circle to its former might. The giant state enterprise spun off CSIC as a separate entity in 1999, and gave it control of government yards in northern China. CSIC came back under CSSC's ownership in 2019, but it retained its brand, management structure and support departments. In September 2024, CSSC announced long-expected plans to re-merge the two firms fully into a single entity.

The full integration will have implications for Chinese defense procurement. CSIC handles a large share of the PLA Navy's surface fleet construction contracts, and unification with CSSC is expected to help streamline warship production.