China's cabinet has approved the merger of the two biggest shipping conglomerates, China Ocean Shipping (Group) Co. (COSCO) and China Shipping Group Co., in the government's latest effort to make the industry more competitive globally, according to Reuters.
The combined entity would become the world's fourth-largest container shipper, with a market share of roughly 8.1 percent. That would be far behind AP Moeller-Maersk A/S, Mediterranean Shipping Co SA and CMA CGM SA.
Denmark's Maersk warned last month that global demand for container transportation this year would grow at a slower pace than previously expected.
"With the approval of the State Council, COSCO and China Shipping will be restructured," the state asset supervisor said on its website on Friday, using a phrase commonly understood to refer to the merger. It gave no other details.
A listed unit of China Shipping, China Shipping Network Technology Co. Ltd, said the merger will focus on freight transport, container shipping, and oil transport services, in a stock exchange filing.
The listed unit also said that its shares will resume trading on the Shenzhen Stock Exchange on December 14.
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