China COSCO Shipping Corporation Limited, a new company formed by the restructuring of China's top two shipping firms, was officially established on Thursday.
By amalgamating COSCO and China Shipping, the new conglomerate will have the world's largest total shipping capacity and the fourth biggest container fleet, with 610 billion yuan (93.6 billion U.S. dollars) in assets.
Xu Lirong, chairman of China Shipping, was announced as chairman of the new company, which is headquartered in Shanghai.
The restructuring will integrate the resources and talents of COSCO and China Shipping and achieve an economy of scale, Xu said, noting that the new company aims to be the global leader in shipping, integrated logistics and related financial services.
Approved by the State Council, China's cabinet, in December, the restructuring plan of COSCO and China Shipping involved four out of eight listed arms controlled by the two companies.
The restructuring was the most complicated ever in China's capital market, with 74 asset transactions worth 60 billion yuan.
China is restructuring and merging state-owned enterprises to increase their competitiveness. The top two high-speed rail makers and two leading nuclear power companies have already merged.
The shipping reshuffle came at a time when weak demand and excessive capacity have hurt the global shipping industry.
COSCO and China Shipping are "under relatively heavy pressure" due to the market downturn and fierce competition from foreign rivals that have carried out mergers and restructuring to gain advantages, Xu told Xinhua.
The two firms have similar operations with overlapping investments and low efficiency, making restructuring imperative, he said.
China COSCO Holdings and China Shipping Container Lines, two listed firms under COSCO and China Shipping, saw their shares rise 2.82 percent and 3.16 percent respectively on the Shanghai bourse on Thursday.
Xu viewed the deal as a boost to China's influence in the global container shipping market, adding that the world's top three container shippers, all Western companies, now control 40 percent of global capacity, while Asia accounts for 70 percent of the world's container freight volume.
