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COSCO poised to acquire OOIL for $6.3 billion

Written by Nick Blenkey
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JULY 10, 2017 — Consolidation in the container shipping industry continues. China’s COSCO Shipping Holdings is set to take control of Hong Kong’s OOIL in a $6.3 billion deal that would create the third largest player in the market, displacing France’s CMA-CGM.

The Tung family, which has around a 69% share of OOIL, has already accepted an HK$78.67 cash offer made for all issued OOIL shares made by COSCO Shipping Holdings and Shanghai Ports Group. On completion of the offer, assuming all OOIL shareholders tender their shares, COSCO Shipping Holdings will hold 90.1%, of OOIL while SIPG will hold 9.9% of OOIL.

The combined COSCO Shipping Lines, a subsidiary of COSCO SHIPPING Holdings, and OOIL will operate more than 400 vessels over a much expanded network, with capacity exceeding 2.9 million TEUs, including vessels on order.

After the deal closes, the two companies will continue to operate under their respective brands, providing container transport and logistic services. Both are members of the Ocean Alliance, and will continue to work together under this framework.

“We respect OOIL’s management team and its expertise, not to mention its people, brand and culture,” said Mr. 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.”

Mr. Andy Tung, Executive Director of OOIL, commented that, “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.”

COSCO Shipping and Shanghai Ports Group say they intend to maintain OOIL’s listed status, and are “committed to retaining the existing compensation and benefit system at OOIL and will not terminate the employment of any employee at OOIL as a result of this transaction for at least 24 months after the close of the offer.”

They also say that they “intend to maintain OOIL’s global headquarter functions and presence in Hong Kong, and utilize the advantage of both companies’ global network to contribute to the economic prosperity of the territory and development of Hong Kong as an international shipping center.”

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