Today, China Shipping Group and China Cosco Group sent a shockwave trough the shipping industry after announcing their merger. The new company, China Cosco Shipping Corporation Limited, will enter a maritime industry that is suffering from overcapacity and low rates at a strategically very difficult period in shipping history. Local analysts though say that the new carrier will strengthen the companies’ competitive edge.
The new conglomerate will have a fleet of 832 ships valued at USD 21.9 billion, becoming a major rival to Maersk, MOL any NYK Line. Capacity-wise, it will be the world’s largest dry bulk and tanker owner, fourth on global scale with respect to its container fleet. The newly merged group will have 46 container terminals globally with overall box volume of 90 million TEU, ranking second in the world. Its container leasing fleet will surpass 2.7 million TEU, making it No 3.
The corporation said it would focus on “6 + 1” clusters, those being shipping, logistics, finance, equipment manufacturing, shipping services, socialized industry and the Internet related activities and business innovation.
Xu Lirong, the current chairman of China Shipping, was named chairman of the new company headquartered in Shanghai.
Approved by the State Council in December, the restructuring plan of COSCO and China Shipping involved four out of eight listed arms controlled by the two companies.
The restructuring was the most complicated ever in China’s capital market, with 74 asset transactions worth 60 billion yuan.