China’s government has approved the multi-billion dollar merger of its state-owned shipping and logistics giant CMG with rival Sinotrans & CSC Holdings, also a state-owned firm.
According to Reuters the merger places brings together CMG’s assets worth an estimated 624 billion yuan ($96 billion) with those owned by Sinotrans & CSC estimated to be about 109 billion.
“This takeover will effectively merge the resources, business and talents of the two giants, and create economies of scale and synergies in operations that include logistics, dry and wet cargo shipping, development of ports and industrial parks, as well as equipment manufacturing,” said CMG in a statement.
The latest move follows last month’s merger of Cosco and China Shipping Group under reform guidelines introduced in September last year designed to make state-owned companies more competitive internationally.
Formerly independent companies, Sinotrans and CSC Holdings merged in 2009 and is China’s largest company specialising in international freight forwarding, air cargo and international express delivery agency, and the second largest shipping agency in the country.
As previously reported, one of Sinotrans most recent automotive contracts involves handling inbound containerised parts destined for Chery's joint venture plant with Jaguar Land Rover in Changshu. Playing its part in what is a complex supply chain between the UK and China, Sinotrans transfers containers at the port of Shanghai for temporary storage before an onward journey of some 80km along the Yangtze River to the inland port of Changshu. There it hands over the material at a deconsolidation centre to Anji-Ceva.