COSCO Shipping Holdings announced that antitrust authorities in China have agreed to allow its acquisition of the parent company of Orient Overseas Container Line (OOCL) to move forward, which will make the combined companies the world’s third-largest container carrier.
Cosco’s partner in the acquisition is a subsidiary of Shanghai International Port Group, which will take a 9.9 per cent stake in OOCL’s parent, Orient Overseas International Ltd (OOIL).
In a brief announcement submitted to the Hong Kong Stock Exchange last Friday, Cosco said China’s Anti-Monopoly Bureau of the State Administration for Market Regulation had chosen not to prohibit its offer for OOIL. The decision by Chinese officials came one day before the June 30 deadline set forth in the original announcement of the proposed acquisition.
Previously the companies said they had received approval from European and US competition authorities, and it was unclear why Chinese officials had waited till the 11th hour to make their ruling.
Their approval was one of the preconditions the companies said had to be met before the deal could move forward when it was announced nearly a year ago on July 7, 2017. When announced, the deal was valued at about HKD49.2 billion (US $6.3 billion).
Friday’s announcement said a “composite document” giving the full terms and details of the offer will be issued within seven days.
The announcement was silent on the future of OOIL’s Long Beach Container Terminal, one of the most automated container terminals in the United States. The acquisition of the terminal is reportedly being reviewed by the US Committee on Foreign Investment in the United States.
A report in the Wall Street Journal had earlier said Cosco has offered to put the terminal into a “US-run trust to allay US national security concerns about Chinese ownership of the facility.”