COSCO Shipping holdings and SIPG jointly offer to acquire OOIL combination creates a global leader

Posted by Daily Shipping Times on 11-07-2017        Tweet

SHANGHAI : COSCO Shipping Holdings Co. Ltd. a majority owned subsidiary of China COSCO Shipping Corporation Ltd, Shanghai International Port (Group) Co., Ltd and Orient Overseas (International) Limited jointly announced that COSCO Shipping Holdings and SIPG have made a pre-conditional voluntary general offer to all shareholders of OOIL to acquire all issued OOIL shares at an offer price of HK$78.67 in cash. On completion, assuming all OOIL shareholders tender their shares, COSCO Shipping Holdings will hold 90.1%, while SIPG will hold 9.9% of OOIL.

The Offer is dependent upon the satisfaction of pre-conditions, which include the necessary regulatory approvals as well as approval from COSCO SHIPPING Holdings shareholders.

The controlling shareholder, who currently holds 68.7% of OOIL, has irrevocably undertaken to accept the Offer.

The transaction marks the latest consolidation in the global maritime industry.

It is believed that the combination of COSCO Shipping Holdings and OOIL can deliver a stronger competitive advantage.

OOIL is the seventh largest container shipping company in the world, with extensive container shipping routes and networks. It is known for its superior service and operational performance in the global maritime industry. The combined COSCO Shipping Lines, a subsidiary of COSCO Shipping Holdings, and OOIL will operate more than 400 vessels over a much expanded yet well-structured network, with capacity exceeding 2.9 million TEUs including orderbook. The combination will enhance the industry leading position of both companies as a whole.

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 intend to maintain OOIL’s listed status following close of the Offer, and 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. Besides that, the Joint Offerors 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.