China’s two biggest state-owned shipping companies plan to merge 11 shipbuilding yards into a single entity in one of the industry’s biggest consolidation moves yet, the Wall Street Journal reports, citing people familiar with the matter.
If it pushes through, the merger of the shipyards of China Ocean Shipping (Group) Co., or COSCO Group, and China Shipping Group Co. is expected to be announced by early next year, the newspaper said.
The two companies had already combined their fleets and port operations last year to create China COSCO Holdings, the world’s fourth biggest container operator in terms of capacity.
The combination of their shipbuilding arms will create China’s third biggest shipbuilding group, the report said.
COSCO owns six yards and China Shipping Group owns five. COSCO also operates two joint-venture yards with Japan’s Kawasaki Heavy Industries Ltd.
It is not known whether the joint ventures will be part of the merger.
Kawasaki said on Monday it may exit the shipbuilding business.
China COSCO Holdings lost US$1.1 billion in the first half of this year as ship orders hit record lows, the Journal said.
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