China State Shipbuilding Corp(CSSC)and China Shipbuilding Industry Co(CSIC)halted trading of their stocks on the A-share market starting from Wednesday,paving the way for the emergence of a shipbuilding giant that will lead the world in assets and revenue.
According to a stock exchange filing,CSSC will issue new A shares to all CSIC shareholders in exchange for their current holdings,in the largest absorption merger ever in China's A-share market.The deal has received approval from the China Securities Regulatory Commission,the country's securities regulator,according to the company.
Once the deal is completed,CSSC will become the world's largest listed shipbuilding company in terms of assets and revenue,with the most comprehensive range of business,according to an article published by the Shanghai Shipping Exchange.
After the merger,CSSC will eliminate horizontal competition between the two listed companies,further consolidating and strengthening its core marine industry focus.The new entity will integrate the resources of both parties,optimize the industrial layout of shipbuilding,and leverage synergistic effects to effectively enhance its core capabilities and competitiveness in order to establish a world-class shipbuilding enterprise with global competitiveness,according to CSSC's stock exchange filing.
"The merger of the two listed shipbuilding giants will further consolidate their complementary research and development(R&D)and production resources and supply chain synergies,driving technological integration and upgrading in the advanced shipbuilding industry,"Li Jin,chief researcher at the China Enterprise Research Institute in Beijing,told the Global Times on Wednesday.
Through market-oriented mechanisms,this restructuring will deepen reforms across CSSC,CSIC and their subsidiaries,enhance their governance structures and operational capabilities,and achieve integrated development of industrial operations and capital management that fosters mutual reinforcement,Li said.
The move is also conducive to accelerating the development of China's high-tech and high-value-added R&D and manufacturing capability,which can enhance the strength of China's shipbuilding industry and its core international competitiveness,according to the expert.
CSSC's absorption of CSIC is not only a capital operation between two listed companies,but also continues the consolidation of China's shipbuilding industry following the high-profile combination of the former"South Ship"and"North Ship"into the China State Shipbuilding Group in 2019.Both CSSC and CSIC are subsidiaries of the group,according to Xinhua.
In recent years,China's shipbuilding industry has been continuously advancing the capability and development of green and high-value-added ship types,while enhancing internal supply chain resilience,and leveraging mergers to achieve synergistic empowerment.
China boasts the world's largest and most comprehensive marine industrial system after years of development,said Ma Weichen,an official of the National Development and Reform Commission,the Xinhua News Agency reported on Wednesday.
According to China's Ministry of Industry and Information Technology,the country's three major shipbuilding indicators all posted growth in 2024,maintaining the top position globally.Shipbuilding completion volume accounted for 55.7 percent of the global total,new orders took up 74.1 percent,and orders on hand accounted for 63.1 percent,the data showed.
