The merger between China Shipping group and the Cosco Group has given rise to a mammoth company that could trigger stability and extended consolidation in the global shipping industry, says a report in the WSJ.
The merger will free the two Chinese shipping groups from competing against each other at home and abroad, in an industry swamped with oversupply and depressed freight rates.
While shipping mergers are rare, when companies of such size come together, further consolidation likely will follow, say industry observers. One example came in December, when French shipping company CMA CGM SA agreed to buy Singapore’s Neptune Orient Lines Ltd. for about $2.4 billion.
