China State Council approves COSCO, China Shipping merger

BEIJING - China’s Cabinet, the State Council, has approved the merger of China Ocean Shipping Group (COSCO) and China Shipping Group, creating the world’s fourth-largest container operator. The merged entity, China Cosco Shipping Group, will be headquartered in Shanghai. On completion of the merger, the Group will be behind only Denmark’s AP Moller Maersk Group, Switzerland’s Mediterranean Shipping Co and France’s CMA CGM SA.

The two giant shipping lines are looking to merge their tanker, dry bulk and port operations in a merger that Wall Street Journal estimates could be worth upward of US$20 billion.

The China Daily reports that China’s shipping industry has been hit particularly hard by the economic slowdown and weakening global demand. It says global freight market is at a three-decade low and many shipowners are now fighting for survival, while the Chinese Government is becoming less and less tolerant in regard to losses of State-owned shipping companies.  www.webershandwick.cn (ATI).