COSCO Shipping has offered to buy Orient Overseas International Ltd (OOIL), which includes its shipping subsidiary OOCL, for $6.3 billion. The deal would make COSCO the world’s third largest container liner.
Following a year full of mergers and acquisitions, this transaction marks the latest wave to hit the global maritime industry. The Group cites that this deal will lead to a stronger competitive advantage. OOIL is currently the seventh largest container shipping company in the world, with extensive container shipping routes and networks. Combined, the Group will operate more than 400 vessels over an expanded and well-structured network, with capacity exceeding 2.9 million TEUs including orderbook.
Post closing, COSCO Shipping Lines and OOIL will continue to operate under their respective brands, providing container transport and logistic services. By leveraging the strengths of each company and achieving synergies, the businesses will enhance their operating efficiencies and competitive positions to achieve sustainable growth in the long term. Both companies are members of the Ocean Alliance, and will continue to work together under this framework.
“We respect OOIL’s management team and its expertise, not to mention its people, brand and culture,” said Mr. Wan Min, Chairman of COSCO Shipping Holdings. “Our company remains committed to enhancing Hong Kong as an international shipping center. Following completion, we will continue to invest and strengthen our industry leadership, providing a more extensive platform for the employees of OOIL to excel.”
Mr. Andy Tung, Executive Director of OOIL, commented that, “We are proud of the business we have built and the people who have been building it. This decision has been carefully considered and we believe it helps ensure the future success of OOIL. We are confident that COSCO Shipping Holdings is the right partner for us.”
The Joint Offerors said that they are committed to retaining the existing compensation and benefit system at OOIL and will not terminate the employment of any employee at OOIL as a result of this transaction for at least 24 months after the close of the offer. The Joint Offerors also intend to maintain OOIL’s global headquarter functions and presence in Hong Kong, and utilize the advantage of both companies’ global network to contribute to the economic prosperity of the territory and development of Hong Kong as an international shipping center.