# New large-scale container merger in Asia could be imminent



## RHP (Nov 1, 2007)

Even though China's Cosco and Orient Overseas in Hong Kong reject whispers of an imminent merger worth around USD 4 billion, it is likely only a matter of time before a deal is settled, reports Drewry and others.


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## Dartskipper (Jan 16, 2015)

I'm glad that's clear. I imagined that the inscrutable Chinese engineers were going to start welding two 40 ft containers together to improve economy of scale. (Jester)


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## Andrew Craig-Bennett (Mar 13, 2007)

This rumour is a hardy perennial. 

In favour: 

1. Cosco uses OOCL's IRIS 2 container software.
2. China has plenty of money to spend, and at the moment shipping is viewed favourably in the Zhongnanhai (Cosco have 32 container ships on order - more than anyone else..)
3. The recent pick up - however feeble - in the container market means that the Tung family would be selling into a rising market
4. Xi Jinping will be in HK on the 1st of July for a ceremony to mark 20 years of reunification...
5. China would probably like to have the biggest container line in the world, and welding OOCL onto China Cosco would get Cosco into the number 3 slot - if as many suspect China has loaned money to CMA-CGM and they were welded on too the goal would be achieved.
6. er, that's all folks

Against:

1. OOCL are the Tung family business and their staff are loyal to the family - a feeling that many of us will remember.Many of their staff, ashore and afloat, would walk, rather than work for Cosco.
2. OOCL have just committed to their new alliance in a big way - taking delivery of the first of their 20s and chartering in 8s to run alongside their 12s in the schedules
3. OOCL are profitable; the Tungs don't need to sell.


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## RHP (Nov 1, 2007)

Thank you Andrew.

Is it not also the case that Cosco is a bit of a basket case itself being the merger of two failing lines being kept alive by government support? which also accounts for the fact they have the biggest order book based on earlier (unsuccessful) business plans?


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## Andrew Craig-Bennett (Mar 13, 2007)

RHP said:


> Thank you Andrew.
> 
> Is it not also the case that Cosco is a bit of a basket case itself being the merger of two failing lines being kept alive by government support? which also accounts for the fact they have the biggest order book based on earlier (unsuccessful) business plans?


https://youtu.be/Oz8RjPAD2Jk


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## richardwakeley (Jan 4, 2010)

When I speak to the officers onboard about this rumour, they always say the Tung family will never sell. So that's their belief, at least.


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## jeraylin (Feb 2, 2008)

President Xi standing on the apron of Hkg airport - standing next to him? Tung Chee Hwa - it will never be allowed to happen in the near future at least. Cosco is often berated by central gov. for losing money "why cant you be like oocl" they say. Its a family company that has its own markets over the last 60 years - above comments are right - most staff would walk.


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## Lurch (Jul 29, 2011)

Agree that COSCO is a bloated basket case that exists on the 'too big to fail model' after decades of expansion.

I remember COSCO buying anything that floated when it started and has been doing nothing but expand since.

The Tung's with OOCL are widely respected both in the ship owing community and by their loyal crews.

As an aside, though not possibly unrelated given the current speculation, there is a certain OOCL Third Mate with his own Youtube channel, which has quite a following.

I cannot imagine him continuing with it without a nod from the company. I recommend viewing for those not up to date!


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## callpor (Jan 31, 2007)

This headline just appeared on Lloyds List?
"Cosco-OOIL acquisition said to be sealed, announcement imminent".


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## Andrew Craig-Bennett (Mar 13, 2007)

SOLD! - To COSCO - one Orient Overseas Container Line, compete with ships, boxes, IT systems, bright and capable staff, sundry offices around the world, loyal customers, etc.,etc., etc., all for the bargain price of US$ 6.3 Bn, or HK$ 78.67 a share or a 31% premium over the closing price on Friday of HK$60.00 a share.

The Tung family, who owned 70% of OOIL, can laugh all the way to Taiwan, where they still own Island Navigation...

COSCO had to cut in Shanghai Terminals for 10% to find the cash...

Rumour has it that CMA-CGM will be next on COSCO's shopping list...


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## Samsette (Sep 3, 2005)

R651400 said:


> Recent statistics show that the most predominant race in Australia is no longer the £10 Pom but Asiatic origin and they obviously intend to keep it that way..................................................[/url]


And the Melbourne Cup.(Smoke) I know, I know, its FA to joke about.


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## Andrew Craig-Bennett (Mar 13, 2007)

RHP said:


> Even though China's Cosco and Orient Overseas in Hong Kong reject whispers of an imminent merger worth around USD 4 billion, it is likely only a matter of time before a deal is settled, reports Drewry and others.


USD6.3billion...

Didn't they do well!


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## Andrew Craig-Bennett (Mar 13, 2007)

... and for our next trick...

http://splash247.com/yildirim-looks-sell-24-stake-cma-cgm/


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## RHP (Nov 1, 2007)

Cosco buys OOCL for USD 6.3 billion

There has been massive speculation in recent months, culminating this Sunday when Cosco Shipping announced that the Chinese major player would take over the Hong Kong firm OOCL for USD 6.3 billion.

In a corporate statement, Cosco Shipping Holding writes that the new major carrier will operate a fleet of more than 400 container ships with capacity of more than 2.9 million teu when the orderbook is included. The new carrier will be the world's third-largest container carrier and thus knock CMA CGM out of the top three.

China Cosco Shipping was founded in 2015 in a merger between the two major Chinese players Cosco and China Shipping, which are both owned by the Chinese state.

OOCL was founded in 1950 by C. Y. Tong in Hong Kong.

"The Offer is dependent upon the satisfaction of pre-conditions, which include the necessary regulatory approvals as well as approval from COSCO SHIPPING Holdings shareholders. The controlling shareholders who currently holds 68.7% of OOIL has irrevocably undertaken to accept the Offer," writes Cosco Shipping Holding.
The controlling stakeholders are the Tung family, who have previously rejected an acquisition but have now approved this deal.

"We are proud of the business we have built and the people who have been building it. This decision has been carefully considered and we believe it helps ensure the future success of OOIL. We are confident that COSCO SHIPPING Holdings is the right partner for us," says Andy Tung, Executive Director of OOIL, about the acquisition.

New strength*

The takeover of OOCL, which held the seventh spot on the ranking of the world's largest container carriers, is the most recent event in the container industry, where massive consolidation has taken place over recent years.

"The acquisition of Orient Overseas further strengthens Cosco's market position and gives it the critical mass to compete with the very top players in every respect," says Basil Karatzas, Chief Executive of Karatzas Marine Advisors in an interview with Financial Times, adding:

"There is little doubt that Cosco likely will not be done and is likely to go after more targets in the near future."

The acquisition will give new strength to Cosco on services where the company has been played a dominant role in the past. 

The world's largest container carriers after the Cosco acquisition
1. Maersk Line 
2. MSC
3. China Cosco Shipping
4. CMA CGM
5. Evergreen Marine

"Cosco can benefit from OOCL's strong presence on routes from the Far East to Australia and to the U.S. The company's operational efficiency has long been admired by outsiders as well," says Han Ning, China director for Drewry 
++

Apparently the Tung family cleared $1 Billion from the deal which helped them swallow their pain.*


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