What’s new: China Merchants Group Ltd. (CMG) is pushing ahead with a major restructuring as the state-owned conglomerate moves to consolidate its container line operations amid a global shipping boom.
Antong Holdings Co. Ltd. (600179.SH) plans to issue shares to China Merchants Energy Shipping Co. Ltd. (601872.SH) to buy the latter’s 100% stake in a container liner and 70% stake in a ro-ro shipping company, according to a stock exchange filing dated Thursday.
CMG is the controlling shareholder of Antong, a leading provider of domestic container shipping services, while China Merchants Energy Shipping is CMG’s Shanghai-listed shipping arm.
The deal is pending regulatory approval. If it goes through, the combined company will have a container capacity of 131,000 20-foot equivalent units, moving it up to 19th place in the global rankings.
China Merchants Energy Shipping will be Antong’s controlling shareholder after the deal, and CMG will be Antong’s de facto controller, the filing said.
The background: Details of the shakeup follow China Merchants Energy Shipping’s announcement in late May to spin off its container and ro-ro shipping subsidiaries, revealing that Antong would gain a controlling stake in both companies.
After the restructuring, Antong will operate transportation for both domestic and international trade, enhancing its ability to monetize its transport capacity, said an analyst at a securities firm. “This transaction will benefit Antong’s expansion in overseas container shipping, and the increased capacity will help extend its service coverage to Southeast Asia, Australia, New Zealand and even the Middle East.”
Han Wei contributed to this story.
Contact reporter Wang Xintong (xintongwang@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)
