The Chinese government has ordered China Merchants Energy Shipping (CMES) and Sinotrans to merge as part of its ongoing plan to consolidate the state-run shipping sector, according to media reports.
The merger, ordered by the Chinese government on September 2, follows the integration of the two groups' operations in August 2014 when they formed a US$1.1bn joint venture named China VLCC. CMES owns 51 per cent of the venture and Sinotrans holds the remaining 49.
The CMES-Sinotran merger comes after news of a potential merger between shipping companies, China Ocean Shipping Company (COSCO) and China Shipping Group (CSG) announced last month.
COSCO and CSG rank as the world’s sixth and seventh largest carriers respectively by fleet size and would form the world’s fourth-largest container line, according to media reports. Both companies have suspended trading of their listed subsidiaries since August 10 pending a major announcement.
China hopes to curb losses due to overcapacity in the market by consolidating its state-owned assets, media reports claim.
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