China: Cosco and China Shipping merger plan receives Beijing approval

The long-awaited merger plan between Cosco and China Shipping, China’s two largest shipping conglomerates, has finally received the go-ahead from China’s State Council. A preliminary scheme will likely be disclosed by the listed units of the pair on Friday.

The new entity, named China Cosco Shipping Group, will be based in Shanghai, local media Caixin reported, quoting a source close to Cosco.

Lloyd’s List earlier reported the two giants are likely to receive Beijing’s approval for their draft merger plan at the end of this year, according to a person familiar with the matter.

The person also said the two state-owned conglomerates might start merging their different segments, including bulker, tanker, boxship and ports all at the same time.

The fusion of the pair en bloc would create a behemoth with total assets around Yuan542bn ($84.2bn) and revenue of Yuan245bn, according to the companies’ 2013 data.

In container shipping, the new group CCSG will become the world’s fourth largest operator, with a market share of 7.8%, according to statistics from Industrial Securities.

Full content: The Wall Street Journal

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