Cosco’s acquisition of OOCL could be the most expensive take over in shipping history
On Sunday 9th July a joint statement was issued by Orient Overseas International Ltd (OOIL) from Hong Kong, Chinese state owned Cisco Shipping Holdings Ltd (Cosco) and Shanghai International Port Group Co (SIPG). Cosco and SIPG are acquiring all of OOIL shares at an offer price of HKD 78.67 (USD 10.07) per share, an overall pace of £4.9 billion. The price represents a 31% premium on Fridays closing price of HKD 60 and values OOIL at around 42.9 billion. On the completion of the deal, Cosco will hold 90.1% while SIPG will hold the remaining 9.9% stake in OOIL. The joint buyers said they will keep the OOIL branding, retain its listed status and maintain the companies’ global headquarters in Hong Kong along with all management. Employees will retain the existing compensation and benefits, nor will any lose jobs as a result of the transaction for at least 24 months. It was only in May that the Orient Overseas Container Line (OOCL) had the worlds largest container ship, the OOCL Hong Kong but just months later the 7th biggest container shipping line is being sold to a Chinese rival. China’s vision of dominating world trade seems to be becoming more of a reality with the take over, and aims to become less dependent on Hong Kong. The take over of the OOCL parent company (OOIL) will also propel Cosco from 4th to 3rd of the global container shipping marketing share.