Serious GXGX: COSCO shares surge to become third largest container line in world

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SHANGHAI/HONG KONG — COSCO Shipping Holdings Co Ltd saw its stock climb on Monday after bidding $6.3 billion for a Hong Kong peer, a deal that would see it become the world's third-biggest container shipper and underline China's supply-chain ambitions.

The offer for Orient Overseas International Ltd (OOIL) comes as China's government pushes to raise the country's profile in global shipping, which dovetails with its Belt and Road initiative aimed at increasing China's influence over distribution from Asia to Europe.

Beijing merged two shippers last year to form COSCO Shipping which, after the latest deal, will rise from fourth to rank only behind Denmark's Maersk Line and Switzerland's Mediterranean Shipping Co (MSC).
"This is negative for Maersk and MSC," said Corrine Png, chief executive of Singapore-based transport stock researcher Crucial Perspective. A deal would make the Chinese shipper a "tougher competitor to deal with on the major trade lanes."

State-backed COSCO Shipping on Sunday offered to buy each OOIL share at a 31.1 percent premium to their Friday close.

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