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China’s Cosco to buy Orient Overseas in $6.3 billion shipping deal

Discussion in 'Coffee Shack (Daily News/Economy)' started by Scorpio, Jul 10, 2017.

  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

    Mar 25, 2010
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    China’s Cosco to buy Orient Overseas in $6.3 billion shipping deal

    By Costas Paris and Joanne Chiu
    Published: July 9, 2017 6:26 p.m. ET

    Industry consolidates amid global down-cycle

    [​IMG] Bloomberg News
    A Cosco cargo ship sits docked at the Port of Vancouver terminal in Vancouver, British Columbia.
    Cosco Shipping Holdings Co., China’s biggest shipping company, agreed to buy smaller rival Orient Overseas (International) Ltd. Co. for $6.3 billion, establishing an Asian container giant at a time when the industry struggles to emerge from a multiyear down-cycle.

    The move will see a half dozen supercarriers grouped into three alliances, move about three quarters of all seaborne trade after a wave of consolidation among the world’s top 20 carriers over the past year.

    The Chinese conglomerate joined Shanghai International Port (Group) Co., one of the world’s biggest port operators, to buy a combined 68.7% stake from Orient Overseas’ controlling shareholder, Cosco 600026, +0.62% and Orient Overseas 0316, +20.00% said Sunday in a joint statement.

    The offer price of 78.67 Hong Kong dollars per share (about $10.07) represents a 31% premium over Orient Overseas’ Friday closing price. The deal will have to be approved by global regulators, which is expected in the next six the eight months.

    An expanded version of this report appears on WSJ.com.

  2. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

    Mar 31, 2010
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    COSCO Deal to Make Ex-Hong Kong Chief, Family $1 Billion Richer

    July 10, 2017 by Bloomberg

    Tung Chee-hwa speaks during the “China and the U.S.: One Belt, One Road and 100-Day Plan,” a discussion hosting high-level delegation of Chinese leaders, in Manhattan, New York, U.S., June 14, 2017. REUTERS/Bria Webb

    By Robert Olsen (Bloomberg) — Former Hong Kong Chief Executive Tung Chee-hwa and his family will be about $1 billion richer with the sale of their container shipping line to Cosco Shipping Holdings Co.

    Tung’s personal net worth will increase by about $400 million to $2.9 billion, according to the Bloomberg Billionaires Index, based on the $6.3 billion Cosco offered for his family’s Orient Overseas International Ltd. Tung, 80, who was chairman of the business before becoming Hong Kong’s first leader during the British handover of sovereignty in 1997, owns 30 percent of the company.

    His younger brother Tung Chee Chen, Orient’s chairman and chief executive officer, holds a 39 percent stake and will boost his wealth by $600 million to about $3.8 billion when the deal is completed. The state-owned shipping giant agreed to pay HK$78.67 for each Orient share, a 31 percent premium over Friday’s closing price. The deal still requires approval from regulators and Cosco investors.

    Tung, currently a vice chairman of China’s top political advisory body, Chinese People’s Political Consultative Conference, was handpicked by Beijing in 1997 for the top job in the financial hub and has been advising the central leadership on foreign policy, especially China-U.S. relations.

    The Tung family, which founded Orient Overseas Container Line in 1969, ran into financial trouble in the 1980s and needed more than $100 million in additional funding that was arranged by Henry Fok, a pro-Beijing property tycoon. Fok, who died in 2006, also played a key role in Beijing’s selection of Tung as Hong Kong’s first leader under Chinese rule.

    © 2017 Bloomberg L.P


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