COSCO Shipping Offers $6.3 Billion For Rival Carrier
Signaling potential consolidation in the global cargo carrier industry, COSCO Shipping, in collaboration with Shanghai International Port Group (SIPG), has offered $6.3 billion for Orient Overseas Container Line (OOCL).
The deal remains subject to regulatory approval. Executives from COSCO and OOCL are in Washington, D.C., this week to brief the Federal Maritime Commission on the status of the ongoing merger. Once the merger is approved, the combined company will have a fleet of more than 400 ships with the capacity to move 2.9 million TEU (twenty-foot equivalent units) of cargo per year, and it will become the second largest transporter of U.S. containerized goods.
Under the merger, Beijing, China-based COSCO and OOCL would continue operating under their own brands, with OOCL maintaining its Hong Kong headquarters and employees.
“We respect OOIL’s management team and its expertise, not to mention its people, brand and culture,” says Wan Min, chairman of COSCO Shipping Holdings. “Our company remains committed to enhancing Hong Kong as an international shipping center. Following completion, we will continue to invest and strengthen our industry leadership, providing a more extensive platform for the employees of OOIL to excel.”
Andy Tung, executive director of OOCP, adds, “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 OOCP. We are confident that COSCO Shipping Holdings is the right partner for us.”