China

Trading in Shares of Both CSSC Offshore & Marine Engineering and China CSSC Holdings Halted; Merger Is Expected

Summary:

  • CSSC Offshore & Marine Engineering (Group) Company Limited (600685.SS) and China CSSC Holdings Ltd (600150.SS) both have recently announced that trading in their shares has been halted because the “controlling shareholder is discussing important restructuring plans about the company”, as reported by Ifeng Finance.
  • The two companies are publicly traded units under the state-owned China State Shipbuilding Corporation (CSSC), which is one of the two largest shipbuilding conglomerates in China.

Why It Matters:

  • The market believes that the trading halt for the two companies suggests that CSSC plans to merge parts or all of the two companies.
  • Recently, China has been accelerating consolidations among SOEs. SGI has reported on merger rumors between China Shenhua Energy and Datang International Power Generation (601991.SS), between China National Building Material and China National Materials Group Corp., and between China Guodian Corporation and Shenhua Group.
  • While CSSC Offshore & Marine Engineering and China CSSC Holdings are both primarily engaged in the manufacture and sale of ships, CSSC Offshore & Marine Engineering is headquartered in Guangzhou, and China CSSC Holdings is headquartered in Shanghai.