Cosco deal for OOCL good for CMA CGM
Tie-up could result in better capacity management as well as other synergies for OCEAN Alliance.
by Dale Wainwright
Cosco Group’s reported interest in acquiring Orient Overseas Container Liner (OOCL)could prove beneficial for CMA CGM, according to one analyst.
The Chinese containership giant is reported to be in a deal worth at least $4bn to acquire its smaller Hong Kong rival.
While OOCL has continually denied that any such deal is in the works, its share priceis up more than 60% this year.
Should a transaction occur, the combined entity would become the third largestcontainer liner with 2.4mteu, outpacing CMA CGM’s 2.3mteu.
“The transaction could actually have a positive impact on CMA CGM as all three liners are part of the new OCEAN Alliance,” said OCBC credit analyst Nick Wong.
“Cosco and OOCL could potentially reap synergies, hence a stronger partner would be to CMA CGM’s benefit.
“Industry capacity could also be better managed, potentially supporting container shipping rates.”