EU clears Cosco takeover of OOCL

MDN İstanbul

The European Union competition watchdog examined the impact of the proposed transaction on the markets where both OOIL and COSCO are active, mainly the deep-sea container liner shipping services market. It concluded that if the market shares of the alliances or consortia that OOIL and COSCO belong to are taken into account, the transaction would affect eight trade routes – both legs of the Northern Europe-North America, Northern Europe-Far East, Mediterranean-Middle East and Mediterranean-Far East trade routes.
In particular, the Commission found that the combined market share of Cosco and OOIL and their consortia partners “would be very significant” on the Northern Europe-North America trade route. However, the Commission concluded that the proposed transaction “would not give rise to competition concerns given, among other things, the presence of significant competitors post-merger, the fact that the companies do not appear to be close competitors and Cosco’s marginal position on the Northern-Europe-North America trade route.”
On the other trade routes where the companies’ activities overlap, it said the transaction would not give rise to competition concerns “because of the small increment brought about by the transaction and the presence of other significant competitors post-merger”.
The Commission also looked at the effects of the transaction on a number of related markets, in particular the market for container terminal services and freight forwarding, without finding any competition concerns. In October, Hong Kong-listed Cosco Shipping Holdings, ultimately controlled by Central SASAC, the Chinese State-owned Assets Supervision and Administration Commission of the State Council, was given the green light by US competition authorities to proceed with its acquisition of OOIL, although it still has to obtain approval from China’s antitrust authorities, the National Development and Reform Commission, and the State Administration of Foreign Exchange.
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