Top Chinese shipping company Cosco have revealed their intention to buy its Hong Kong competitor’s OOIL for a fee of $6.3bn (£4.9bn).
The deal will place Cosco as the highest ranked company in the shipping industry, with about 400 vessels.
More than half of OOIL’s partner has approved the offer; nevertheless the purchase will still require regulatory authorization.
However, this will be the most recent wave of alliance, which has left the top six shipping industry regulating approximately two thirds of the maritime market.
A Great Expansion Move
The OOIL’s subsidiary OOCL is presently the world’s seventh biggest shipping organization, with over 3.2% of international market stake, confirm by the shipping database Alphaliner.
Cosco is giving $10.07 per share, a 38% premium above OOIL’s closing financial value on Friday.
OOIL was established by Chief Executive Tung Chee-hwa and still possesses a 69% share in the company.
They generally agreed on the proposal, although it still requires the authorization of Cosco shareowners, and also the Chinese and US directors.
Over volume and passive demand is now leading to a larger scale of diversity in the shipping line.
Top Korean shipping line Hanjin filed for loss last year, and at the same time France’s CMA CGM acquired Singapore’s Neptune Orient company.