State-owned Chinese shipping line COSCO has moved to acquire Orient Overseas, in a bid to create the world’s third largest container shipping line by fleet capacity.
The offer of $6.3bn represented a 31% premium over the Hong Kong line’s last closing stock price.
According to an OOCL press release, the combination of the two lines would operate more than 400 vessels, with capacity exceeding 2.9m TEUs including orderbook.
Alphaliner data suggests that COSCO has a market share of 8.4% while OOCL’s share is 3.2%. The combined share of 11.6% would see them surpass CMA CGM’s share of 11.2%.
Post closing, COSCO and Orient Overseas will continue to operate under their respective brands, providing container transport and logistics services. In addition, both companies are members of the Ocean Alliance, and would continue to work together under this framework.
“We respect OOIL’s management team and its expertise, not to mention its people, brand and culture,” said Mr. Wan Min, Chairman of COSCO SHIPPING Holdings. “Our company remains committed to enhancing Hong Kong as an international shipping center. Following completion, we will continue to invest and strengthen our industry leadership, providing a more extensive platform for the employees of OOIL to excel.”
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