China Merchants Group has moved forward with the consolidation of offshore yard assets with China International Marine Containers (CIMC) and AVIC, a merger which will create one of the largest offshore yard groups in the world.
An official at CIMC confirmed to Splash that the merger has been in the planning stages for a long time, but final plans for the consolidation have not been confirmed yet.
Sources tell Splash that China Merchants has started preliminary due diligence work on the offshore assets of CIMC, having first reported back in 2016 that the two parties had started negotiations regarding the merger.
In April 2017, China Merchants Port Holdings transferred its entire 24.53% equity share in China International Marine Container (CIMC) to China Merchants Industry Holdings for about HK$8.54bn ($1.1bn) as part of the plan. CIMC currently operates three offshore bases in Yantai, Longkou, and Haiyang in Shandong and China Merchants Industry runs two offshore yards in Shenzhen and Haimen.
China Merchants has been restructuring its shipyard assets, and the group bought a controlling stake in the loss-making AVIC Weihai Shipyard in April after it integrated two ex-Sinotrans yards, Jinling Shipyard and Jiangdong Shipyard, into China Merchants Heavy Industry earlier this year. Splash understands that China Merchants is looking to acquire the rest of the shipyard assets from AVIC.
Last year, China Merchants also acquired Zhejiang Eastern Shipyard and integrated the yard into Yiu Lian Dockyard. It is now the fourth largest shipbuilding group in China following CSSC, CSIC, and Cosco Shipping Heavy Industry.
Currently China’s largest two shipbuilding groups CSSC and CSIC are also in the process of a merger.