COSCO, China Shipping merger to create world’s 4-largest container shipper

China’s State Council has approved a merger of the country’s two biggest shipping conglomerates, China Ocean Shipping (Group) Company (COSCO) and China Shipping Group Co, in the government’s latest effort to make the industry more competitive globally.

The combined entity would become the world’s fourth-largest container shipper with a roughly 8.1 percent market share. That would be far behind AP Moeller – Maersk A/S, Mediterranean Shipping Co SA and CMA CGM SA.

Denmark’s Maersk warned last month that global demand for container transportation this year would grow at a slower pace than previously expected.

“With the approval of the State Council, COSCO and China Shipping will be restructured,” the state asset supervisor said on its website on Friday, using a phrase commonly understood to refer to the merger. It gave no other details.

A listed unit of China Shipping, China Shipping Network Technology Co. Ltd, said the merger will focus on freight transport, container shipping, and oil transport services, in a stock exchange filing.

The listed unit also said that its shares will resume trading on the Shenzhen Stock Exchange on December 14.

Share trading in the listed units of the two state-conglomerates, including COSCO’s flagship China COSCO and China Shipping‘s China Shipping Development , have been halted since Aug. 10.

No company representatives were immediately available for comment.

Collectively, COSCO and China Shipping control 488 billion yuan ($76 billion) in assets, Barclays analysts have estimated.

The merger also represents a massive reshuffling of central government-controlled assets just as consolidation of the country’s state-owned industry gathers momentum.

Premier Li Keqiang last week said the government would spend the next two years dealing ruthlessly with overcapacity, with permanent loss-making companies going “under the knife”.

Profits earned by China’s industrial companies fell 4.6 percent in October on the year, declining for the fifth consecutive month, the National Bureau of Statistics said last month.

For central government-controlled state conglomerates, profits for the first 10 months of the year dropped 11.3 percent, the Ministry of Finance said in a separate statement.

The government already has driven the mergers of its two biggest nuclear power firms and top two train makers. Government regulators this week announced that Minmetals Corp of China would take control of Metallurgical Corp of China, which builds and designs mining and plant equipment

Also Read:

French shipping major CMA CGM offers $2.43b to buy controlling stake in Singapore NOL; Temasek exits

(Reporting by Beijing Monitoring Desk; Editing by Clarence Fernandez)

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.