China’s State Coucil has officially given approval to the merger between two state-run shipbuilding groups China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC), after the two shipbuilders confirmed a plan for a long expected merger in July.
According to an announcement by the State Council, the State-owned Assets Supervision and Administration Commission (SASAC) will set up a new entity called China Shipbuilding Group to absorb both of the two shipbuilding groups.
“After being approved by the State Council, CSSC and CSIC has implemented a joint restructuring,” SASAC said in a short announcement.
The central government has appointed Lei Fanpei, chairman of CSSC as the chairman of the new shipbuilding super group while Yang Jincheng, general manager of CSSC, and Wu Yongjie, general manager of CSIC, have been appointed as general manager and a director of the new group respectively.
When contacted by Splash, an official at CSSC said no details of the merger can be revealed at this stage.
Both groups have started major internal restructuring in the past year in order to pave the way for the merger.
CSIC and CSSC were one conglomerate until 1999 when they were spilt in two with the Yangtze river serving as a geographic marker, with CSIC in charge of northern yards and CSSC taking yards south of the river.
The merger is expected to create one of the largest shipbuilding groups in the world, competing with the South Korean shipbuilding conglomerate about to be created by the merger of HHI and DSME.
Following the merger, China Shipbuilding Group will control nine listed companies with combined assets worth over RMB800bn ($112bn).
VesselsValue data show CSSC has 275 newbuildings and CSIC has 135 newbuildings on their orderbooks.
As China is pushing forward the consolidation of the entire shipbuilding industry, another major state-run shipbuilder China Merchants Heavy Industry has recently initiated a mixed-ownership reform by tapping private investors to invest in the company.