COSCO to Join Bid to Take Over Hong Kong Shipping Giant OOCL

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(Beijing) — Chinese shipping giant COSCO will join a bid to take over OOCL, its largest Hong Kong-based rival, with other bidders belonging to a new maritime alliance that starts operating in April — one that could reshape the global shipping industry.

The state-owned China COSCO Shipping Co. Ltd. will compete with Evergreen Marine Corp. from Taiwan and France’s CMA-CGM SA in the takeover bid, but COSCO was more likely to win the deal, a source from COSCO told Caixin.

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Chinese shipping company COSCO is competing with Evergreen Marine and CMA-CGM to acquire Hong Kong-based OOCL, which holds 2.8% of the global shipping market.
The acquisition is part of a broader industry shift involving the formation of the Ocean Alliance, which will start in April and includes COSCO, CMA-CGM, and other major shippers.
This new alliance aims to reshape the global shipping industry by sharing resources among members and is expected to impact existing alliances like Ocean Three, G6, and CKYHE.

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Chinese shipping conglomerate COSCO is set to participate in a competitive bid to acquire OOCL, a major Hong Kong-based shipping company. This move involves other significant players from the newly formed maritime alliance, which includes Evergreen Marine Corp. from Taiwan and France's CMA-CGM SA. Despite multiple bidders, COSCO is considered the likely winner according to an internal source [para. 1][para. 2].

OOCL stands as the ninth-largest global shipper by cargo capacity, holding 2.8% of the market share. The company has a rich history dating back to the 1930s and has expanded its operations across various continents including Asia, Europe, North America, and Australia [para. 4][para. 5].

The shipping industry has faced challenges recently, highlighted by OOCL’s financial performance which showed a loss of $76.3 million in the first half of 2016 after having a profitable period in the previous year. However, shares of OOCL’s parent company, Orient Overseas (International) Ltd., have seen a significant rise amid speculations of this potential acquisition [para. 6][para. 7].

The impending takeover is part of strategic movements within the Ocean Alliance, set to commence operations in April for a duration of five years. This alliance aims to facilitate resource sharing among its members—COSCO, CMA-CGM, Evergreen Marine Corp., and others—and is poised to become the largest setup in terms of capacity within the industry [para. 7][para. 8].

This new formation will significantly alter existing alliances and market dynamics. The Ocean Three group will dissolve as two of its members merge into this new alliance. Similarly, other groups like G6 and CKYHE will experience shifts in membership and potentially reduced market influence due to these changes [para. 9][para. 10].

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China COSCO Shipping Co. Ltd.: Summary： China COSCO Shipping Co. Ltd., a state-owned enterprise, is a major player in the global shipping industry. The company has shown interest in expanding its influence by participating in a bid to take over Orient Overseas Container Line (OOCL), which is the largest Hong Kong-based shipping company. This move pits COSCO against other significant industry players such as Evergreen Marine Corp. from Taiwan and France's CMA-CGM SA in the takeover bid. Despite competition, sources close to COSCO have suggested that it is more likely to win the deal.COSCO's involvement in this potential acquisition aligns with its participation in a new maritime alliance set to commence operations in April, which could significantly reshape the global shipping landscape. This alliance, known as the Ocean Alliance, includes COSCO among its founding members and aims for collaboration among its members through sharing container ships, ports, and other resources and information over five years.The article also mentions an image of COSCO Europe, a container vessel owned by China COSCO Shipping Co. Ltd., highlighting the company's operational capacity and presence in international waters.Furthermore, it's important to note that China Shipping (Group) Co., which merged with China Ocean Shipping (Group) Company to form China COSCO Shipping Co. Ltd., will join this new alliance, indicating strategic moves within the industry to consolidate resources and enhance competitive positions globally.Overall, China COSCO Shipping Co. Ltd.'s bid for OOCL represents a significant step towards increasing its market share and influence within the global shipping industry amidst shifting alliances and market dynamics.

Evergreen Marine Corp.: Summary： Evergreen Marine Corp. from Taiwan is one of the bidders competing with China COSCO Shipping Co. Ltd. and France’s CMA-CGM SA in a takeover bid for Orient Overseas Container Line (OOCL), a major Hong Kong-based shipping company. Evergreen Marine Corp. is part of a new maritime alliance that will start operating in April, which could significantly impact the global shipping industry. This alliance, co-founded by Evergreen along with COSCO, CMA-CGM, and OOCL, aims to share container ships, ports, and other resources among its members for five years.

CMA-CGM SA: Summary： CMA-CGM SA is a France-based shipping company that is one of the bidders in the takeover bid for Orient Overseas Container Line (OOCL), a Hong Kong-based shipping company. CMA-CGM, along with COSCO from China and Evergreen Marine Corp. from Taiwan, is competing to acquire OOCL. Additionally, CMA-CGM is part of a new maritime alliance set to start operating in April, which also includes COSCO and aims to reshape the global shipping industry by sharing container ships, ports, and other resources among its members. This alliance will become the world's largest in terms of capacity. Furthermore, CMA-CGM was mentioned as having acquired APL in June 2016, indicating its active role in consolidating its position within the global shipping industry.

Orient Overseas Container Line (OOCL): Summary： Orient Overseas Container Line (OOCL) is the ninth-largest shipper in the world based on cargo-carrying capacity, accounting for 2.8% of the global shipping industry's total capacity according to Alphaliner. It is a Hong Kong-based company that was founded in the 1930s by Tung Chao-yung, who is the father of Hong Kong’s first chief executive, Tung Chee-hwa. OOCL has expanded its shipping routes to cover Asia, Europe, North America, and Australia. Despite its significant presence in the global shipping market, OOCL reported a loss of $76.3 million in the first half of 2016 after having recorded a profit of $215.7 million during the same period in the previous year. However, shares in its listed parent company, Orient Overseas (International) Ltd. (OOIL), have recently rebounded amid rumors about OOCL's potential sale, with shares surging by 31% from the last trading day of 2016.

Orient Overseas (International) Ltd. (OOIL): Summary： Orient Overseas (International) Ltd. (OOIL) is the listed parent company of Orient Overseas Container Line (OOCL), which is the ninth-largest shipper in the world by cargo-carrying capacity, accounting for 2.8% of the global industry according to Alphaliner. OOCL, a Hong Kong-based shipping company founded in the 1930s by Tung Chao-yung, father of Hong Kong's first chief executive Tung Chee-hwa, has expanded its shipping routes across Asia, Europe, North America, and Australia. However, OOIL experienced financial difficulties recently, reporting a loss of $76.3 million in the first half of 2016 after having recorded a profit of $215.7 million in the same period the previous year. Despite these challenges, shares in OOIL have rebounded recently amid market rumors about OOCL's potential sale, with its shares surging by 31% on Wednesday from the last trading day of 2016.

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