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Wednesday, July 26, 2017

COSCO to Buy OOCL for USD 6.3 bln

July 9, 2017

Photo: Orient Overseas Container Line Limited

Photo: Orient Overseas Container Line Limited

 Chinese Shipping Major Cosco Group has agreed in principle to buy its shipping rival and  Hong Kong’s No. 1 box mover, Orient Overseas Container Line (OOCL), in deal that could be valued around USD 6.3 billion. 

The takeover will catapult Cosco the world’s third-biggest container carrier after Denmark’s Maersk Line and Swiss-based Mediterranean Shipping Co. 
 
In a press release, the State-owned Cosco said that it will pay shareholders of OOCL,, HK$78.67 a share in cash, a 31 percent premium over the stock’s last closing price.
 
According to Reuters,  OOIL's controlling shareholders had on Friday agreed to sell their 68.7 percent stake at that price to COSCO Shipping, which is making the offer with Shanghai Port International Group (SIPG) that will take 9.9 percent, they said.
 
COSCO Shipping will have a fleet of more than 400 vessels and capacity exceeding 2.9 million TEUs (twenty-foot equivalent units) should the deal go through, it said.
 
Bloomberg, quoting Alphaliner said that Cosco currently has a market share of 8.4 percent while Orient Overseas has 3.2 percent Their combined 11.6 percent share would make the merged entity the third-biggest container-shipping company, overtaking CMA CGM with 11.2 percent, according to the shipping data provider.
 
COSCO Shipping itself was created from the state-driven merger of former rivals China Ocean Shipping (Group) Company and China Shipping Group.
 
MediterraneanReutersBloomberg