China is to combine two of its state-owned shipping giants
Shanghai - AFP
China will combine two of its state-owned shipping giants, the companies said, the sector's second multi-billion-dollar merger in a month as the government pushes consolidation of its nationalised enterprises.
Sinotrans & CSC Holdings Co., the nation's third largest shipping company, will become a wholly-owned subsidiary of China Merchants Group (CMG), a conglomerate with interests in transport, finance and property, according to company statements.
Both are among the more than 100 state-owned companies which report directly to the central government, though Sinotrans will no longer do so after the restructuring, said the State-owned Assets Supervision and Administration Commission, which oversees them.
Earlier in December, China approved the merger of another two of its biggest state-owned shipping companies, China Ocean Shipping Group (Cosco) and China Shipping Group.
The moves follow China's release in September of broad reform guidelines for state-owned companies aimed at making them more competitive internationally.
The latest merger will help the companies to build "the world's best company to compete globally", CMG said in its statement late Tuesday.
Sinotrans has assets of more than 100 billion yuan ($15 billion), while China Merchants holds assets of 624 billion yuan, the Xinhua news agency reported.
On Wednesday afternoon, CMG's transport arm China Merchants Holdings (International) was down 1.20 percent in Hong Kong.
Logistics provider Sinotrans Ltd. fell 1.41 percent but another unit, Sinotrans Shipping, gained 2.67 percent, both in Hong Kong.
China, the world's second-largest economy, is overhauling its dominant state-owned sectors to make them more efficient as it grapples with stalling growth.
Beijing has already merged its top two train makers -- China CNR Corp and CSR Corp -- into a single conglomerate, aiming to avoid competition between the two as China vies for lucrative rail contracts overseas against industry giants such as Germany's Siemens and Bombardier of Canada.