China’s State Council has cleared the merger between China Ocean Shipping Group (Cosco) and China Shipping Group meaning the joining of the two liners will be announced shortly, according to China Daily.
The merged liners would together be the world's fourth-largest container operator, behind Maersk Line, MSC and CMA CGM.
Given China’s recent economic woes, the move can be seen as an effort from the Chinese government to consolidate its assets.
The merger includes combining the two lines’ tanker, dry bulk and port operations, and could be worth upward of US$20 billion, according to The Wall Street Journal.
How the merger will affect the alliances Cosco and China Shipping are part of is still unclear, yet ripples will inevitably be felt across the sector.
It has been a busy period in the carrier industry, with French liner CMA CGM recently acquiring liner NOL, although recent analysis suggests there won’t be a wave of mergers and acquisitions in the shipping sector with consolidation likely to be the more prominent trend.
Collectively, Cosco and China Shipping have a containership fleet of 331 vessels.