US Security Clearance Has Been Won by COSCO Shipping of China for OOIL Deal

COSCO Shipping Holdings of China said on Sunday that a key review body of U.S. has given clearance for their plans of acquiring a shipping firm named, Orient Overseas International Ltd on issues related to security for $6.3 billion.

As per a statement from COSCO, it was on 30^th June when all the prior conditions set for the OOIL offer, that was made last year had fulfilled after they had received approval from the anti-monopoly regulator of China. They already have the necessary approvals from the anti-monopoly regulators of Europe and the United States.

The regulatory filing was done on Sunday where the company had said that there was a notification from the U.S. Committee on Foreign Investment in the United States, that it does not have any kind of security issues outstanding, after carrying out an agreement with the U.S. government to divest the terminal business of Long Beach container to any third party. COSCO even said that the container terminal business’ ownership would be transferred to a trust while they will be seeking for a buyer.

There were concerns about the fact that the trade war going on between U.S. and China might affect some major deals undertaken by the firms from U.S. and China when they would seek approval from the regulatory authorities.

On Friday, both U.S. and China had implemented tariffs against each other’s goods, with no chance of having any resolution in the near future.

OOIL being acquired by COSCO would result in the shipping giant from China become the third-largest container shipping line in the world.

This particular deal happens to be the latest in a range of mergers and acquisitions taking place in global container shipping. It has certainly left the top six shipping lines to have control around 63 percent of the market share. This deal also comes up at a time when the shipping industry is going through a phase of transformation, wherein a recovery is in the process after a period of quite a lengthy downturn.