Chinese state-owned shipping conglomerate COSCO Shipping Group has officially completed its acquisition of Orient Overseas International Ltd., the parent company of ocean carrier OOCL, according to a statement from OOIL.
Under the terms of the deal, COSCO Shipping will now own 75 percent of OOIL, while Shanghai International Port Group will take 9.9 percent of the company’s stock and the remainder will be held by a group of other companies that includes a subsidiary of world’s-largest port operator, CK Hutchison.
The two companies announced the $6.3 billion purchase in July 2017 and COSCO shareholders approved the offer in October, but the deal hit a snag when the Committee on Foreign Investment in the United States (CFIUS) raised concerns about transferring ownership of OOCL’s Long Beach Container Terminal Inc. (LBCT) to a Chinese state-run entity.
Earlier this month COSCO and OOIL said in a filing with the Hong Kong Stock Exchange they had entered into an agreement with the U.S. Department of Homeland Security and Department of Justice under which COSCO would transfer LBCT into a trust overseen by a sole U.S. citizen until the deal was complete and then divest the terminal to a “suitable, unrelated third party” acceptable to the U.S. government.
COSCO has said previously that it intends to maintain OOCL as a separate brand and to maintain OOIL’s listing on the Hong Kong Stock Exchange.
According to an operational update issued by OOCL earlier this week, the company carried nearly 1.7 million TEUs of containerized cargo in the second quarter of 2018, 4.6 percent more than in the same 2017 period, helping boost revenues 4 percent year-over-year to roughly $1.46 billion.
The announcement of the COSCO-OOIL deal’s completion was overshadowed, however, by news of a cyberattack that affected COSCO's operations in the United States, Canada, Panama, Argentina, Brazil, Peru, Chile and Uruguay.
Although the company has yet to release any specific details about the nature or source of the cyberattack, the attack caused widespread network failures, resulting in the temporary loss of email and internet phone systems, but did not affect normal vessel operations, according to COSCO.
COSCO said in a statement Friday that “network applications in the Americas are being recovered gradually,” adding that data connections with customs authorities, port terminals and railroads in North America have been fully restored. The company said it expects to have fully restored email service in the Americas sometime next week.