China Shipping Group and China Ocean Shipping Group (COSCO) are about to go through a merger, according to government orders.

As reported by some local media sources, Beijing has issued orders for the two government-run companies to design a plan for merging on Thursday. Expectations are for the plans to be completed by three months.

Leading Chinese Shipowners To Undergo Merger

Photo: Tara

Together, the two biggest shipping and logistics companies of China have control over 11 listed companies in Shenzhen, Shanghai, Singapore and Hong Kong.

Among the companies specified are China COSCO Holdings with its respective container and dry bulk fleets, China Shipping Container Lines (CSCL), which is a purely container ship entity and China Shipping Development (CSD) with its dry bulk and tanker fleets.

CSCL and COSCO respectively rank as the seventh and sixth biggest carriers in the world when accounting for fleet size. CSCL has an established pact with United Arab Shipping and CMA CGM whereas COSCO is a member of the CKYHE alliance.

By undergoing the above-mentioned move of merging with one another, the two companies’ fleets are going to form the fourth largest container line in the world. The move, however, might lead to some anti-trust issues in particular jurisdictions.

A share trading halt for both China Shipping Group and COSCO became effective yesterday.