COSCO Gets Nod for OOCL Takeover in the Nick of Time
COSCO Shipping Holdings has received the ‘all clear’ from the Chinese anti-trust body for its proposed USD 6.3 billion takeover of Orient Overseas Container Line (OOCL).
“On June 29, 2018, COSCO Shipping Holdings received the decision from the Anti-Monopoly Bureau of the State Administration for Market Regulation of the PRC not to prohibit the offer. Accordingly, as at the date of this announcement, all the pre-conditions to the offer have been fulfilled,” the companies said in a joint announcement.
The approval came in the nick of time to enable COSCO to meet its previously set date for the completion of the acquisition, which was scheduled for the end of June.
The merger deal was said to be in hot water after the Committee on Foreign Investment in the United States (CFIUS) raised concerns over COSCO taking control of the Long Beach terminal in April.
OOCL holds a 40-year concession to operate the facility at the Port of Long Beach, which is one of the biggest gateways for imports into the US.
In order to seal the merger deal, the Chinese major said it could either divest or carve out the terminal in order to get CFIUS’ go-ahead.
Now that all hurdles are said to be cleared, and once the transaction is completed, COSCO would hold 90.1% of OOIL, thus becoming the world’s third-largest container carrier. COSCO would have a combined fleet of 400 vessels, with capacity exceeding 2.9 million TEUs including orderbook, pushing CMA CGM from its spot, according to Drewry’s estimate.
The latest merger is part of the recent wave of consolidation in the container shipping industry which has seen numerous liner majors join forces. The most recent activities included the combination of Japanese trio NYK Line, MOL and K Line’s container businesses under the magenta-colored ONE brand.
World Maritime News Staff