Date for COSCO’s billion-dollar acquisition deal set in stone
COSCO Shipping’s ongoing acquisition of Orient Overseas Container Line (OOCL) is set to be complete by the end of June 2018, according to Reuters.
Huang Xiaowen, Vice Chairman of Cosco, told a press conference: “Up to now we are quite confident to push forward this acquisition... it’s progressing normally.”
COSCO offered Orient Overseas International Ltd, the parent company of OOCL, US$6.3 billion in 2017 to acquire the shipping liner and thereby make COSCO the third-largest container shipping line in the world.
The shipping liner business is increasingly becoming dominated by several key players, as the overcapacity issue continues in the market.
Originally liners were opting to outdo each other with the sizes of ships they acquired, however with such vast capacities, liners found it hard to fill their ships, which in turn led to vessel sharing alliances with rivals.
This situation has led to key alliances competing with each other and acquiring smaller lines in a bid to become the port powerful liner of the seas.
The takeover of OOCL by COSCO, China’s state-owned shipping line, shows the ambitions of the Chinese government within the maritime sector.
As well as vastly extending COSCO’s market share in recent years, China has also made inroads into the port sector, investing heavily in projects around the world.
COSCO not only dominates in the container trade, but is also a world-leading dry bulk carrier.