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Release time：2018-05-03 browse：611second
The plan of COSCO's acquisition of OOIL is likely to be hampered by the deterioration of Sino US trade relations and Trump's containment of China.
The US Foreign Investment Commission (CFIUS) is evaluating the acquisition of China overseas shipping group to Hongkong Orient Overseas International, the Wall Street Journal quoted an insider as saying. Orient Overseas has a large container terminal located in Long Beach, California. CFUIS's survey makes COSCO's prospects for control of the terminal worrisome.
In July last year, the central and remote sea sea flag under the central and remote sea control and the Shanghai and Hong Kong Group and the OOCL, the former both issued a total cash offer for the latter with a total price of $6 billion 300 million. After the transaction was completed, the central and remote control will hold 90.1% of the eastern overseas stock and the 9.9% of the Hong Kong Group.
According to the person familiar with the matter, according to the plan, Orient Overseas will sell the above terminal to COSCO Shipping. This week, COSCO Shipping executives have met with officials of CFIUS to ease the concerns of the US and propose to remove the docks in the takeover.
It is not clear whether the above proposal of COSCO can get CFIUS's release to the acquisition. However, as a full-time supervision and evaluation of foreign capital merger and acquisition of American enterprises, CFIUS has repeatedly blocked Chinese enterprises from investing in the United States through its national security review mechanism.
Alphaliner recently said that investors' enthusiasm for the acquisition of Orient Overseas seems to have weakened. In April 10th, the company's share price fell to HK $69.25, the lowest closing price since the purchase of HK $78.67 per share last July.
Alphaliner said that the stock price was 12% lower than the COSCO issuance price, and investors are increasingly worried that US regulators may block the deal.
Although COSCO's acquisition of Orient International has passed the review by the US antitrust agency, it still needs approval from the Foreign Investment Commission of the United States.
COSCO has announced that the deal will be completed by June 30, 2018. Huang Xiaowen, vice chairman and executive director of COSCO Hai Kong, said that the acquisition process for Orient Overseas is normal. "Last year when we announced the takeover, we announced that the transaction is expected to be completed in June 30th this year, and the timetable is unchanged." And for the current Sino US frictions that may cause restrictions on China's capital, Huang Xiaowen points out that some of the assets of OOCL are in the United States, which needs to be approved by the US. "We will examine and report according to the relevant requirements of the United States. We are very confident that we can push ahead with the successful completion of the transaction through efforts.
Alphaliner said that if COSCO failed to complete the transaction at the deadline, OOCL international would receive a split fee of $253 million, but the cost would be abandoned if the U. S. Foreign Investment Commission failed to meet the requirements.