Asia/Pacific News
No Word On COSCO and China Shipping Merger Talks
Talks involving a potential merger between China Ocean Shipping Company (COSCO) and China Shipping Group seem to have extended yet another week with no news on the alleged deal, JOC reports.
Earlier this month, a handful of COSCO and China Shipping subsidiaries, including China Cosco Holdings, China Shipping Container Lines (CSCL), Cosco Pacific, China Shipping Development, and China Shipping Technology Network, all had trading of their shares suspended.
COSCO said Monday is was preparing for a "material event" adding that, "at present, the event is in the planning process, there are still uncertainties."
The suspensions are expected to be reviewed on September 8, 2015.
Previous reports have said that the Beijing government would like preliminary merger plan within three months, beginning from August.
Research analysts have said that a merger is in line with China's current strategy of consolidation of state-owned enterprises (SOE).
“The potential shipping merger increases the likelihood of shipping SOEs to be included in the second batch of SOE reform candidates,” said Barclays in a research note.
It is expected that a merger of Cosco Container Lines and CSCL would create the world's fourth largest container line.
Earlier this month, Drewry also released a note saying that a merger between the two shipping companies could create a domino effect and damage industry competition.
