In the evening of June 27, China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC) announced that the Mergers and Reorganizations Review Committee of the Shanghai Stock Exchange (SSE) is scheduled to convene a review meeting on July 4 to examine the share swap and absorption merger between CSSC and CSIC.
According to the restructuring plan, CSSC intends to issue A shares to all CSIC shareholders for a share exchange merger. Among them, CSSC is the absorbing merger party and CSIC is the absorbed merger party. In this transaction, after the ex-rights and ex-dividends adjustment, the exchange price of CSSC is 37.59 yuan per share and that of CSIC is 5.032 yuan per share. The exchange ratio is 1:0.1339, that is, each CSIC share can be exchanged for 0.1339 shares of CSSC.
Upon completion of the merger, CSIC will be delisted and its legal status will be revoked. CSSC will assume and take over all of CSIC’s assets, liabilities, businesses, personnel, contracts, and all other rights and obligations. The A-shares issued by CSSC as a result of this share exchange merger will be listed and traded on the main board of the Shanghai Stock Exchange.
The announcement indicates that the global shipbuilding industry is now embracing a recovery, with indicators such as global shipbuilding completions, new order intakes, and order backlogs continuously improving and rising. Shipbuilding enterprises are thus facing critical development opportunities. Both CSSC and CSIC are leading enterprises in China’s shipbuilding industry. This transaction can further integrate the advantageous resources of both sides, fully unleash synergistic effects, assist the surviving company in seizing the opportunities of shipbuilding industry transformation and upgrading, build a world-class shipbuilding enterprise, and become a leading force in the development of the global shipbuilding industry.
Both CSSC and CSIC are listed companies controlled by China State Shipbuilding Group, with high business overlap in shipbuilding and maintenance, constituting horizontal competition. Through this transaction, the shipbuilding and maintenance businesses under CSSC and CSIC will be uniformly integrated into CSSC, which helps standardize horizontal competition, improve the company’s operational quality, and safeguard the long-term interests of the company and minority shareholders.
CSSC’s main products include various types of military ships, auxiliary ships and civilian bulk carriers, oil tankers, container ships, large cruise ships, large LNG ships, VLCC, VLOC, as well as polar research vessels, supply ships, cable-laying ships, rescue ships, semi-submersible ships, passenger and vehicle ferries and other official research vessels and special ships.
CSIC is mainly engaged in the research, development, design and manufacturing of ships, covering marine defense and marine development equipment, marine transportation equipment, deep-sea equipment and ship repair and modification, ship accessories and electromechanical equipment, strategic emerging industries and others. The main products include marine defense equipment, marine transportation equipment, marine scientific research equipment and marine development equipment.
According to the announcement, this transaction will strengthen the concentrated operational capability of the surviving company, enhance the high-end ship type manufacturing capacity of its subordinate shipyards, promote the high-end transformation of the surviving company’s ship and marine products, and build the brand name of “China State Shipbuilding”. The integration will fully unleash synergistic effects, promote the surviving company to carry out differentiated brand overall management according to the characteristics of different shipyards, tilt resources to promote subordinate major shipyards to establish competitive advantages and barriers for their main built ship types, thereby improving the discourse power of China’s shipbuilding industry in international standard setting and enhancing the brand premium of Chinese ships in the global shipbuilding industry.
Upon completion of the transaction, major core shipbuilding and repair yards under CSSC Group, including Jiangnan Shipyard, Dalian Shipbuilding Industry Corporation (DSIC), Waigaoqiao Shipbuilding, Wuchang Shipbuilding Industry Group, Guangzhou Shipyard International, Beihai Shipbuilding, and CSSC Chengxi Shipyard, will be integrated into the merged CSSC. As the ship assembly listing platform of CSSC Group, the new CSSC will become the world’s largest flagship shipbuilding listed company, leading the global order backlog scale.