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Chinese shipbuilders CSIC and CSSC confirm merger

China’s two largest state-owned shipbuilding groups China Shipbuilding Industry Corporation (CSIC) and China State Shipbuilding Corporation (CSSC) have confirmed a plan to merge, according to the separate exchange filings released by several listed units of the two companies.

The listed arms of the two groups had issued similar statements and said that their controlling shareholders, CSIC and CSSC, are planning for strategic restructuring and are waiting for related authorities to approve. The detailed consolidation plans are not revealed now.

CSIC and CSSC, established in 1999, own multiple shipyards across China. CSIC’s assets are mainly located at North China while CSSC’s assets cover South China.

The two groups already started internal management changes and assets restructuring recently which are believed to be the preparation for the big merger.

The global shipbuilding industry has been facing severe overcapacity following the onset of the global financial crisis in 2008. Many smaller and mid-sized yards have been declared bankrupt.

The consolidation of CSIC and CSSC has been long rumoured and its official confirmation follows news earlier this year that the world’s largest shipbuilder Hyundai Heavy Industries (HHI) would acquire the second biggest yard Daewoo Shipbuilding and Marine Engineering (DSME).

Read more: Hyundai Heavy inks definitive agreement to acquire DSME

China has been accelerating the restructuring among state-owned companies covering several industrial sectors to optimise state-owned assets structure and reduce horizontal competitions.

The nation’s two biggest shipping companies, Cosco and China Shipping completed consolidation in 2016, while another two logistics service providers, China Merchants Group and Sinotrans CSC also completed integration in 2017.

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