The Chinese government’s Assets Supervision and Administration Commission of the State Council has approved a reorganization of the two shipping companies that “aims to achieve economies of scale and synergies.”
China’s state-owned Assets Supervision and Administration Commission of the State Council (SASAC) announced Tuesday the combination of the logistics firm Sinotrans & CSC Holdings with the conglomerate China Merchants Group.
Sinotrans is the largest freight forwarding company in China and China Merchants is a major terminal operator with operations at 27 ports in 14 countries.
In a filing with the Hong Kong stock exchange, Sinotrans said it will become a wholly-owned subsidiary of China Merchants.
The “reorganization aims to achieve economies of scale and synergies in particular in the areas of logistics, energy and bulk shipping, property development, ports and marine and off-shore engineering between the two groups to speed up the development of an internationally competitive leading enterprise,” the company added.
The combination of the two companies comes in the wake of the announcement earlier this month by COSCO and China Shipping (CSCL) that they will merge their ocean shipping and port terminal operations, a combination that would see the containership business of CSCL absorbed into COSCO.
China Merchants Group is a conglomerate with three core businesses:
• Transportation, including ports and related services, toll roads, energy shipping and logistics;
• Finance, including banking, securities, funds and fund management, and insurance and insurance brokerage;
• And residential and industrial real estate.
According to Sinotrans, 76.5 percent of its revenues came from freight forwarding operations in the first half of this year, while 15.1 percent came from from logistics, 4.2 percent from storage and terminal operations, and 4.2 percent from other services.
China Merchants Group to acquire freight forwarder Sinotrans
