On May 8, China CSSC Holdings Limited (hereinafter referred to as “CSSC”) and China Shipbuilding Industry Corporation (hereinafter referred to as “CSIC”) simultaneously issued the “Announcement on the Acceptance of Application Related to Major Asset Restructuring Matters”. The Shanghai Stock Exchange has accepted CSSC’s application to issue shares to purchase assets.
As disclosed in the announcement, CSSC intends to issue A shares to all the shareholders of CSIC for the absorption and merger of CSIC, with CSSC as the absorbing party and CSIC as the absorbed party in the transaction. The transaction is subject to review and approval by the Shanghai Stock Exchange and registration by the China Securities Regulatory Commission and other necessary approvals, approvals, filings or licenses required by relevant laws and regulations that may be involved (if required) before it can be formally implemented.
According to the previously disclosed transaction plan, the business areas of CSSC and CSIC overlap to a high degree, constituting intra-industry competition. After the implementation of this transaction, CSSC will inherit and take over all assets, liabilities, businesses, personnel, contracts and all other rights and obligations of CSIC. As the surviving company, CSSC will eliminate intra-industry competition between the two listed companies and further consolidate and highlight its main business of shipping and marine.
As previously reported, on September 3, 2024, CSSC and CSIC launched the absorption merger and reorganization, with an estimated total transaction price of over RMB 110 billion. The transaction is the largest reorganization project ever in the A-share capital market up to now, and also the largest corporate merger case in the global shipbuilding industry in terms of transaction amount up to now.
According to information, CSSC integrates the group’s large-scale shipbuilding and repair, electromechanical equipment, offshore engineering and other businesses; CSIC is a listed company in the whole industry chain of ship R&D, design and manufacturing, with business covering five major business sectors, namely, marine defense and ocean development equipment, marine transportation equipment, deep-sea equipment and ship repair and conversion, ship supporting and electromechanical equipment, strategic emerging industries and others.
The two companies have a high degree of overlap in the field of ship assembly business, which constitutes intra-industry competition. This reorganization will solve the intra-industry competition problem between CSSC and CSIC in the field of ship assembly business. After the reorganization is completed, the surviving listed company will become the world’s largest flagship shipbuilding listed company leading the world in terms of asset scale, operating income scale, and number of ship orders.