Our Director of Sales, Glenn Hall, provides the following commentary on the potential sale of OOCL to COSCO.
There have been long standing rumours in the market of OOCL’s potential sale to COSCO Shipping. Last Saturday, 8 July, the OOCL Board of Directors announced that COSCO has offered HK$49 billion (US$6.3 billion) to acquire the Hong Kong based shipping line, owned primarily by the Tung Family. The Tung family has accepted the offer, which still needs regulatory approval and consent from COSCO investors.
COSCO was positioned as the fourth-largest carrier in the world after the merge of COSCO and China Shipping during 2016, OOCL was positioned as the seventh-largest carrier. The combined entity would move them past CMA-CGM to be the third-largest carrier in the world by capacity, behind Maersk Line and MSC .
Sources at OOCL have advised us that, as part of the offer, the brand name, current operations and business policy will remain as is for a minimum of 2 years, ahead of any merge into the COSCO business. So, for the time being its current business as usual for OOCL and certainly is until the above regulatory bodies sign off on the arrangement.
The likely acquisition continues a contraction of shipping lines and capacity globally, impacting into the Australian and New Zealand market.
Over the past 2 to 3 years there has been a series of acquisitions, mergers and bankruptcy of high profile carriers:
2015 CMA-CGM purchase APL from parent company NOL and 2016 acquires NOL
2016 China Shipping / COSCO merge
2016 Hapag Lloyd and UASC merge
2016 Maersk purchase Hamburg Sud
2016 Hanjin files for bankruptcy
OOCL and COSCO operate in same loops China to Australia including all A3 loops, it will make OOCL/COSCO the largest operator in the CN/AU market. ACA has excellent relationships with both carriers and they play important roles in our carrier relationships to and from ANZ/South East and Far East markets and we are well placed to further enhance our relationship with whatever changes evolve over the coming years.
We will keep you updated on any changes through our newsletters and of course you can also get updates through your various sales points of contact at ACA International