CHINA has approved another strategic restructuring of two state-owned shipping-related conglomerates, the second such move this month in its effort to assist the shipping industry reeling from slowing global trade and overcapacity.
China Merchants group was given the go-ahead to acquire Sinotrans & CSC by the State Council, China's cabinet, State-owned Assets Supervision and Administration Commission (Sasac), according to media reports.
In a statement Sasac said: "Sinotrans & CSC will be wholly merged into China Merchants Group and it will no longer be directly supervised by Sasac".
"The reorganisation aims to achieve economies of scale and synergies, in particular in the areas of logistics, energy and bulk shipping, property development, ports and marine and off-shore engineering between the two groups, to speed up the development of an internationally competitive leading enterprise," logistics provider Sinotrans Ltd. said in a filing to the Hong Kong Exchange.
The two holding companies had combined sales of more than CNY 160 billion (US$25 billion) in 2013, according to their websites and data compiled by Bloomberg, the Chicago Tribune reported.
Sinotrans & CSC's business includes freight forwarding - by water, land and air - and dry-bulk, oil-tanker and container shipping. While China Merchants Group focuses on ports, toll roads and oil and gas shipping, it also has major finance and real estate businesses.
China Merchants Group's total assets at the end of last year exceeded CNY 600 billion (US$92.4) billion), six times that of Sinotrans & CSC, the SCMP reported.
Earlier this month, China also approved the takeover of China Shipping Container Lines (CSCL) by COSCO Container Lines, creating the world's fourth-largest shipper after the tie-up.
Source : HKSG.