July 1 will mark 20 years since former OOCL boss Tung Chee-hwa became the first chief executive of Hong Kong following its reunification with China. With current Chinese president due in town on that date to commemorate the handover anniversary, the start of next month could also be the day that Cosco finally seals a $4bn-plus deal to take over Hong Kong’s most famous shipping brand.
Multiple sources, including the normally reliable Wall Street Journal, are now reporting a deal between state-backed Cosco and the Tung family controlled OOCL is in the offing.
The Wall Street Journal claims the takeover offer is worth “at least” $4bn. If consummated, Cosco would leapfrog CMA CGM into third spot in the global liner rankings with a combined fleet of around 2.4m slots. Both OOCL and Cosco are in the same new container grouping, the Ocean Alliance, which launched on April 1 with partners CMA CGM and Evergreen.
Shares in OOCL’s parent, OOIL, leapt by more than 8% today on the Hong Kong Stock Exchange. OOCL sale rumours have been a near constant this year amid the dramatic consolidation seen within the container sector over the past 18 months.