BEIJING Dec 11 Two of China’s most significant shipping firms could release statements within days about a attainable merger, a senior government official stated on Friday following media reported cabinet had authorized the tie-up.
The combination of China Ocean Shipping (Group) Firm (COSCO) and China Shipping Group would develop the world’s fourth-largest container shipping firm with a roughly eight.1 percent share, a main step in Beijing’s program to develop a globally competitive maritime sector.
“About the merger program of China Shipping and COSCO, I would recommend you monitor statements from the two firms in the coming days,” Zhang Xiwu, vice chairman of the Assets Supervision and Administration Commission (SASAC), the agency that spearheads state-sector mergers, told reporters.
A merger of the two firms would represent a huge reshuffling of government-controlled assets as consolidation of China’s state-owned industries gathers momentum.
Collectively, COSCO and China Shipping handle 488 billion yuan ($ 75.66 billion) in assets, according to Barclays analysts.
Even so, as a merged entity they would nevertheless lag far behind the top 3 business players – APM Maersk, Mediterranean Shipping Organization and CMA CGM, which oversee practically 40 percent of the market, analysts said.
Share trading in the listed units of the two conglomerates, including COSCO’s flagship China COSCO and China Shipping’s China Shipping Development , have been halted considering that Aug. ten.
Chronic over-capacity and slow financial growth have pushed worldwide freight rates to record lows, top firms to enter vessel-sharing alliances and look for acquisitions. ($ 1 = 6.4495 Chinese yuan renminbi) (Reporting by Brenda Goh, Mattew Miller and Chen Aizhu Editing by Stephen Coates)