The ongoing dramatic contraction in China’s maritime universe sees China Merchants Energy Shipping (CMES) being tipped to merge with Sinotrans&CSC. Local media in Shanghai report that Beijing’s State-owned Assets Supervision and Administration Commission (SASAC) has called for the two firms to merge. The move follows on from a decision taken in August last year by the pair to form a joint venture – China VLCC – to operate all their supertankers. The pair have also hooked up to buy up to 10 VLOCs together recently.
Sinotrans&CSC is itself the product of a tricky merger dating back to 2009 between China National Foreign Trade Transportation (Group) Corp (Sinotrans) and Changjiang Shipping Co (CSC), while CMES is the shipping arm of China Merchants Group.
This latest enforced Beijing betrothal follows on from the Cosco – China Shipping merger, more details of which are expected soon. All listed units of Cosco and China Shipping have been suspended pending a major announcement for the last four weeks.
Throughout China’s maritime landscape mergers are taking place – whether it be in ports, shipyards or lines as Beijing aims to take a more rational approach to expansion in the sector, which got out of hand in the past decade leading to heavy losses this decade.