Merger of Two Top Chinese Shipbuilding Subsidiaries Creates Global Shipbuilding Giant

Merger of China State Shipbuilding Corporation Subsidiaries
Expected to Become the Largest Absorption Merger Transaction

The proposed merger between two key shipbuilding subsidiaries of China State Shipbuilding Corporation Limited (CSSC), the world's largest shipbuilding company, has passed regulatory review.

According to Chinese media outlets such as Securities Daily and Jiemian News on July 5, China CSSC Holdings Limited (hereafter "China CSSC"), a subsidiary of CSSC, announced the previous day that its planned absorption merger with China CSSC Offshore & Marine Engineering (hereafter "CSSC OME") has been approved by the Mergers and Acquisitions Review Committee of the Shanghai Stock Exchange.

This marks significant progress in the restructuring process initiated by the Chinese government. The merger will proceed with China CSSC issuing new shares in exchange for existing shares of CSSC OME.

Under the latest merger plan, shareholders will be able to exchange one share of CSSC OME for 0.1339 shares of China CSSC.

Going forward, only procedures such as registration with the China Securities Regulatory Commission and additional approvals in accordance with relevant laws and regulations remain for the merger to be finalized.

Local media noted that upon completion, this will become the largest absorption merger transaction in the history of A-share listed companies.

Shipyard in China. Screenshot from China Caixin.

Founded in 1998, China CSSC is engaged in both military and civilian shipbuilding, repair, and marine engineering. It owns four shipbuilding companies: Jiangnan Shipyard, Waigaoqiao Shipbuilding, Zhongchuan Changxing, and Guangchuan International.

Established in 2008, CSSC OME operates in marine defense and marine development equipment, and owns major shipyards such as Dalian Shipbuilding, Wuchang Shipbuilding, and Beihai Shipbuilding.

Industry experts predict that following the merger, the surviving company will become the world's largest listed shipbuilding company in terms of asset size, operating revenue, and vessel orders.

Last year, China CSSC received orders for a total of 154 vessels, amounting to 12,724,600 DWT (deadweight tonnage), while CSSC OME secured orders for 103 vessels (15,899,500 DWT). Combined, this accounts for approximately 17% of the global shipbuilding order volume.

As of the closing price on July 4, the market capitalization of China CSSC and CSSC OME stood at 146.7 billion yuan (approximately 27.96 trillion won) and 105.6 billion yuan (approximately 20.12 trillion won), respectively.