COSCO’s proposed $6.3 billion purchase of Hong Kong-based Orient Overseas International Ltd (OOIL) can go ahead after the US gave its approval yesterday afternoon, according to Bloomberg.
The US Department of Homeland Security’s concerns about the deal’s threat to US trade means that China-based COSCO has to sell Long Beach Container Terminal in California, which is currently owned by OOIL, to a third party..
The takeover, originally tabled in July 2017, passed EU approval in December and was approved by China’s anti-trust authorities last week.
The Committee on Foreign Investment in the US’ (CFIUS) ruling means the Long Beach Container Terminal, one of the most automated shipping facilities in the world, will be transferred to a trust, whose principal trustee must be a US citizen.
It also paves the way for COSCO to create the third biggest container line in the world, after A.P. Moller-Maersk A/S and Mediterranean Shipping Co.
COSCO new combined fleet will have 400 vessels and be able to manage an annual capacity of 2.7 million TEUs. The deal comes as US and China find themselves in the middle of a trade war. Since Donald Trump became president, at least 10 US/China deals have collapsed.