China: Second large shipping Merger approved in one month

China has approved another strategic restructuring of two state-owned shipping-related conglomerates, the second such move this month as the government steps up efforts to shrink industries plagued by overcapacity and create globally competitive businesses.

Sinotrans & CSC Holdings Co. will become a wholly owned subsidiary of China Merchants Group Ltd. and will cease to be directly controlled by the State-Owned Assets Supervision and Administration Commission, the agency known as SASAC said on its website  Tuesday. The two holding companies had combined sales of more than $25 billion in 2013, according to their websites and data compiled by Bloomberg.

“The reorganization aims to achieve economies of scale and synergies, in particular in the areas of logistics, energy and bulk shipping, property development, ports and marine and off-shore engineering between the two groups, to speed up the development of an internationally competitive leading enterprise,” logistics provider Sinotrans Ltd. said in a filing to the Hong Kong Exchange.