Drewry: OOIL Acquisition Marks Conclusion of Merger and Acquisition Wave

Drewry says the sale of OOIL "means there aren’t many other takeover candidates left on the shelf." Image: OOCL

Drewry Shipping Consultants Limited (Drewry) Monday said the sale of Orient Overseas (International) Limited (OOIL) - principal of Hong Kong-based Orient Overseas Container Line (OOCL) - to COSCO Shipping Holdings Co. Ltd. (COSCO Shipping Holdings) and Shanghai International Port (Group) Co., Ltd. (SIPG) means there "aren't many other takeover candidates left on the shelf," concluding a wave of mergers and acquisitions within the container shipping industry.

"Such is the scale of the carriers within the top 7 that any merger within that group would find it difficult to pass regulatory approval," explained Drewry.

"There could still be some minor regional acquisitions but the big wave of container M&A looks to have been concluded with this deal."

As Ship & Bunker reported yesterday, the deal is set to see COSCO Shipping become the third largest box shipper by capacity in the world.

"Where there are losers, there are winners. Notwithstanding any potential roadblocks to future M&A, the consolidation that has already occurred, plus much brighter market prospects and the moratorium on new ships, offers carriers a golden opportunity for far greater profitability in the near future," said Drewry.

"With fewer carriers, that in time will become financially stronger; the pendulum is swinging back towards those that have grown to survive."

As Ship & Bunker reported in January, Alphaliner has said that OOCL has long been seen as "a prize catch" because of its consistently profitable container shipping operations and strong yield management.