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STATE-OWNED Cosco Shipping has won the approval of the ruling European Commission for its US$6.3 billion takeover of Orient Overseas (International) Ltd, parent of its principal holding Hong Kong's Orient Overseas Container Line (OOCL).

"The European Commission has made a decision to allow the offer to proceed," said a joint Cosco-OOIL statement.

With tacit approval by US regulators in October and an early go-head from China, all that is in the way today now is a clearing of the acquisition by China's State-owned Assets Supervision and Administration Commission of the State Council, the Chinese cabinet.

The European Commission said it had examined the impact on the market and found there would be no competition concerns because of the presence of "significant competitors post merger", reported IHS Media.

Despite finding that the market share of the combined Cosco-OOIL company and its Ocean Alliance partner CMA CGM would be significant, especially on the transatlantic, the commission said Cosco itself had a marginal presence on the North Europe-North America run.

Under the deal, expected to be finalised by April, Cosco will hold 90.1 per cent of OOIL and Shanghai International Port Group will hold 9.9 percent. The liftings of Cosco and OOCL would take the combined carrier volume past those of Maersk Line-Hamburg Sud, according to Alphaliner.

But shippers are unhappy, reports Newark's Journal of Commerce. European Shippers' Council (ESC) maritime chief Fabien Becquelin said: "Alliances have not been to the profit of the customers with a lot of reduction in calls in each port. The balance is negative. Increased size of ships has only led to congestion at ports, which is not good."

  • 2017-12-08