- China Approves Largest A-Share Merger in Shipbuilding History.
- CSIC to Be Delisted as CSSC Takes Over Assets and Workforce.
- Merger Aims to End Internal Competition and Boost Naval Strength.
China State Shipbuilding Corporation Limited (CSSC) has just gotten the green light from the Shanghai Stock Exchange to absorb China Shipbuilding Industry Company Limited (CSIC) in a groundbreaking deal worth 115.2 billion yuan (around USD 16 billion). This marks the largest absorption merger ever seen in China’s A-share market, reports Marine Insight.
Share Exchange Plan and Delisting
As part of the merger, CSSC will issue new A-shares to all CSIC shareholders in exchange for their current holdings. The exchange ratio values CSIC shares at 5.032 yuan and CSSC shares at 37.59 yuan, meaning that for every CSIC share, shareholders will receive 0.1339 CSSC shares. Once the deal is finalised, CSIC will be delisted, and CSSC will take over all its assets, contracts, liabilities, and workforce.
Pending Regulatory Approvals
Although the Shanghai Stock Exchange has approved the deal, it still needs to be registered with the China Securities Regulatory Commission and go through other necessary procedures before it can take full effect.
Strategic Sector Consolidation
This merger fits into China’s larger plan to consolidate and streamline its shipbuilding industry. Back in 2019, the government merged the former “South Ship” (CSSC) and “North Ship” (CSIC) into a single parent company: China State Shipbuilding Group. Now, both CSSC and CSIC operate as subsidiaries under this umbrella, which has grown to be the world’s largest shipbuilding conglomerate.
Goals: Reducing Redundancy and Enhancing Naval Strength
By merging CSSC and CSIC, China aims to cut down on internal competition, especially in shipbuilding and repair. This integration is also expected to strengthen the country’s naval modernisation efforts. The parent group has announced plans to transfer overlapping assets, including those from the prominent shipyard Hudong-Zhonghua, into CSSC over the next three years.
Combined Orderbook and Market Share
In 2024, CSSC managed to secure 154 ship orders, totalling a hefty 12.72 million deadweight tons (DWT), while CSIC followed closely with 103 ships, amounting to 15.89 million DWT. When you put them together, these two companies accounted for 257 ship orders, which is about 28.61 million DWT, making up nearly 17% of all global shipbuilding orders for that year, according to data from Clarksons.
Post-Merger Outlook
Following the merger, the China State Shipbuilding Group will maintain control with an estimated 49% ownership stake in the newly formed entity. The combined company is expected to boast total assets of around 400 billion yuan (USD 56 billion) and generate annual revenue of approximately 130 billion yuan, as projected by maritime analysts at Alphaliner.
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Source: Marine Insight
