What’s new: China’s two largest state-owned shipbuilding conglomerates are one step closer to a planned merger after they cleared global antitrust reviews by major countries and regions.
China State Shipbuilding Corp. Ltd. (CSSC) and China Shipbuilding Industry Corp. (CSIC) plan to combine and form China Shipping Group under a joint restructuring plan approved by the State Council, according to statements issued Tuesday by CSSC’s two Shanghai-listed units.
Completion of the international antitrust review is seen as a signal that the two conglomerates are about to start substantial integration. The companies are combing through their businesses and studying ways to eliminate competition within the group, the CSSC units said.
In the integration and restructuring, China Shipping Group will integrate the two enterprises’ commercial shipbuilding businesses, while CSIC’s listed unit China Shipbuilding Industry Co. Ltd. (601989.SH) will focus on military shipbuilding and research, according to people close to the integration.
The background: Since 2015, Beijing has been pursuing efforts to consolidate the country’s bloated state-owned sector to pare down leverage and increase global competiveness. Most of China’s major state-owned enterprises were carved out from former monopolies that executed Beijing’s directives when the country’s economy was subject to a greater degree of central planning than today.
A number of major mergers have since taken place, including the 2017 combination of Shenhua Group Corp. and China Guodian Group Corp., which created the world’s largest power utility, as well as the union of chemical giants China National Chemical Corp. and Sinochem Group in 2018.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
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