China Ocean Shipping Co., or Cosco Group, and China Shipping Group Co., two of the country’s biggest shipping companies, are set to issue details of their multibillion-dollar merger plans, the Wall Street Journal reported, citing people with knowledge of the matter.
The proposed merger will combine the two companies’ container shipping operations to create the world’s fourth-largest container shipping line, the newspaper said.
The plans could also cover other business divisions that include commodities shipping, port and logistics operations and oil-tanker operations, the people said.
The value of a merger of the two firms’ container shipping operations alone may range from US$10 billion to US$20 billion, the newspaper quoted one of the sources as saying.
The combined value of all their assets would be around US$80 billion.
The central government is trying to reform state-owned enterprises to create bigger and stronger national champions that can better compete abroad.
China’s slowing economy and industry overcapacity are weighing heavily on the shipping business.
Beijing is also pushing two other state shipping companies, China Merchants Energy Shipping Co. and Sinotrans & CSC Holdings Co., to merge some units, although talks are at an early stage, the Journal said.
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