Alphaliner: Despite Rumours, China COSCO, CSCL Merger "a Remote Option"

Speculation of a possible merger sent stock prices of China COSCO and CSCL soaring in April to four-year highs

China COSCO Holdings Company Limited (China COSCO) and China Shipping Container Lines Co., Ltd. (CSCL) have again denied speculation that COSCO Container Lines Co., Ltd. (COSCON) and CSCL are working on a merger, Alphaliner reports.

China COSCO and CSCL first issued clarification announcements on April 17 to the Hong Kong Stock Exchange, after local media reports suggested the potential integration of COSCO, CSCL, Sinotrans & CSC Holdings Co., Ltd. (Sinotrans & CSC) and China Merchants Group, four state-owned shipping enterprises.

China COSCO then issued a second clarification announcement on April 28 to further deny persisting merger rumours.

Speculation of a possible merger sent stock prices of China COSCO and CSCL soaring in April to four-year highs, and despite the official denials, the stock prices of both companies have continued to grow, with China COSCO's share price climbing by 34 percent after the April 17 statement.

Alphaliner says COSCO and CSCL have been unwilling to pursue a merger voluntarily because of fears of job losses and curbs on management power, as a result, a potential consolidation "remains a remote option".

Rumours appear to have been sparked by statements from the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) in December 2014, which suggested that there could be a possible reduction in the number of enterprises controlled directly by the central government in seven key industries, including shipping.

However, SASAC has not confirmed any plans and also has also denied media reports of a merger of the shipping companies.

Last month, COSCO sold 14 old vessels in order to renew its fleet.