Dive Brief:
- Orient Overseas Container Line (OOCL) again dismissed takeover talks as media-fueled rumors Wednesday, in a statement to American Shipper.
- Various outlets reported sources close to the matter claimed COSCO Shipping would acquire OOCL for over $4 billion as early as July.
- A COSCO-OOCL merger would create the third largest shipping line by capacity, and the second top carrier serving the U.S. market, JOC.com reports.
Dive Insight:
It's not the first time OOCL and COSCO have denied a merger, but that does not mean it's not happening.
Quite the contrary: shipping lines often deny leaked deals (like new alliances or partnerships) for months before a surprise morning announcement admitting it was happening all along. In just one recent example, Hyundai Merchant Marine denied a breakdown of negotiations with the 2M Alliance before announcing it had settled for a scaled down partnership. In addition, companies are disincentivized from leaking news of a merger as such news may change the deal's valuation due to stock speculation.
A further clue suggesting COSCO has been preparing for the deal comes as the shipping line suspended trading its stock amid "asset restructuring," JOC.com reports. Recent reports suggest this may be due to an acquisition of a port in Spain and related to its shipyard assets, but it may also signal the company's attempts to secure financial means for a takeover.
That said, rumors of an OOCL takeover have been circulating since January, and nothing has happened yet. However, the renewed reports suggest the forecast event may happen soon, in a move that would once again shake up the industry status quo.
