Cosco Shipping to acquire OOIL for $6.3bn
China Cosco Shipping Corporation Limited (Cosco Shipping) has offered to acquire Orient Overseas (International) Limited (OOIL) at a price of $6.3bn, confirming earlier rumours of the takeover deal that has been circulated since January this year.
The cash offer made by China’s largest state-owned shipping conglomerate will see it assume 90.1% in Hong Kong-listed OOIL, which owns the container line Orient Overseas Container Line (OOCL), MANA correspondent reported.
Port operator Shanghai Port International Group (SIPG) will take the remaining 9.9% stake in OOIL.
The offer of HKD78.67 for each OOIL share was made in respect of the total of 429,950,088 OOIL shares representing 68.7% of its issued share capital.
“Cosco Shipping Holdings believes this acquisition will enable both Cosco Shipping Lines and OOIL to realise synergies, enhance profitability and achieve sustainable growth in the long term,” said a joint statement from Cosco Shipping’s Shanghai and Hong Kong-listed Cosco Shipping Holdings and from OOIL.
“Upon completion of the offer, the combined Cosco Shipping Lines and OOIL will become one of the world’s leading container shipping companies with more than 400 vessels and capacity exceeding 2.9m teu including orderbook."
The marriage of Cosco Shipping Lines and OOCL will make them the third world's largest carrier with a combined 11.6% global market share with carrying capacity of around 2.42m teu, according to analyst Alphaliner. Cosco Shipping Lines is currently the fourth biggest with a 8.4% market share while OOCL is seventh with 3.2% market share.