China COSCO buys world¡¯s largest dry bulk fleet

China COSCO intends to buy major dry bulk shipping assets from COSCO Group for RMB 35.6 billion, in an attempt to become a global leader in integrated shipping and to reinforce its market leadership.

According to the signed agreement, China COSCO proposes to acquire 100% equity in COSCO Bulk Carrier Co, Qingdao Ocean Shipping Co, Golden View Investment and Shenzhen Ocean Shipping Co from COSCO Group.

As at June 30, 2007, these subsidiaries together operated the world’s largest dry bulk fleet, with 412 dry bulk vessels, 202 of which were owned vessels, and a total shipping capacity of 32.0 million DWT, or 8.4% of the world’s total.

The gross tonnage of cargo shipped by these subsidiaries grew at a CAGR of 15.9% from 2004 to 2006, while market share increased from 6.6% to 8.1% during the same period.

China COSCO’s fleet will increase from 144 vessels prior to the acquisitions to 556 vessels after, with capacity growing from 5.68 million DWT to 37.7 million DWT.

After the closing of the acquisition, China COSCO will broaden the scope of business, extending further along the shipping value chain and becoming an integrated shipping company engaged in container shipping, dry bulk shipping, logistics, port terminal operation and container leasing.