Cosco Shipping Ports will acquire a 16.82% stake in Qingdao Port International (QPI), operator of China's sixth busiest port.
According to Reuters, the company revealed their plans on Sunday January 22. The new stake will work to expand COSCO's port network that has been steadily building through several large global deals in recent years.
Under the agreement, Shanghai China Shipping Terminal Development, a subsidiary of COSCO Shipping Ports, will pay USD $844 million for the shares in QPI. The deal, to be settled through a combination of equity and cash, will boost COSCO's share in the Qingdao firm to 18.41%, added the company in a statement.
The statement also said “Upon completion of the acquisition and the disposal, the company will have an increased direct stake in Qingdao Port International rather than investing only in a company which operates a single container terminal in the port of Qingdao”.
The parties also agreed to collaborate to develop Qingdao port into an international shipping hub in Northeast Asia and to co-invest in overseas terminal projects including the Khalifa Port Container Terminal II project in Abu Dhabi.
Commenting on this cooperation, the Cosco stamement said “The increased investment in, and the subsequent strategic cooperation with, a major port in China will also strengthen the company’s leading position in the Greater China region, which is in line with the company’s strategy of enhancing control over terminal assets”.
This acquisition is a strategic move from Cosco, who now help operate a port that is consistently listed in the top ten busiest ports in the world. Cosco will be looking to improve their global economic performance after the company reported profit dips last October (2016).