The Chinese Government has approved a merger of the two state-owned shipping conglomerates, China Ocean Shipping (Cosco) and China Shipping.
The merger is estimated at $80bn. However, if restricted to container shipping operations the value could reach up to $20bn, reported The Wall Street Journal.
The merged entity will be called China Cosco Shipping Group and will be based in Shanghai, reported local news agency Caixin.
The combined entity is expected to integrate the companies’ port operation businesses, commodities shipping as well as tanker divisions.
The move will mark the consolidation of the world’s sixth and seventh largest container shipping firms, who control a total of 11 listed entities in Shanghai, Shenzhen, Hong Kong and Singapore.
China Cosco Shipping will combine the container-shipping operations of both the companies to create the world’s fourth-biggest container-shipping line.
COSCO had announced earlier in a stock exchange filing that the suspension of trading of its stocks should be over in January with the trading having been suspended in the wake of anticipated asset restructuring.
The two companies were asked by the government to merge in response to a slump in the shipping industry in China, in August this year.
As part of the country’s effort to restructure state-owned enterprises (SOEs), China CNR and CSR Corporation, China’s state-owned rail firms, merged to form a $26bn company in January this year.