iMarine

CSSC intends to absorb and merge with CSIC for a major asset reorganization

On September 2, two giants of China’s shipbuilding industry, China CSSC Holdings Limited (CSSC) and China Shipbuilding Industry Company limited (CSIC), both released the “Announcement on the suspension of trading of major assets restructuring”, which stated that the two parties were planning a major asset reorganization for the absorption and merger of CSIC by CSSC.

The announcement disclosed that in order to further focus on major national strategies, accelerate the high-quality development of shipbuilding business, standardize the competition in the same industry and improve the operation quality of the listed company, CSSC intends to merge with CSIC through the issuance of A-shares to all shareholders of CSIC. On September 2, both parties have signed the Agreement of Intention to Absorb and Merge.

The announcement shows that the transaction constitutes a connected transaction and is expected to constitute a major asset reorganization as stipulated in the Measures for Administration of Major Asset Reorganization of Listed Companies, and the transaction will not lead to a change in the actual controller of the company.

In accordance with the relevant regulations of the Shanghai Stock Exchange, the trading of both CSSC and CSIC will be suspended from the opening of the market on Tuesday, September 3, 2024, and the suspension is expected to last no longer than 10 trading days.

It is worth noting that the transaction is the largest merger and acquisition transaction in the A-share capital market in the past decade, marking the China Shipbuilding Corporation to solve the ship and sea main industry competition in the same industry has taken a key step.

Currently, the combined market capitalization of the two companies is close to RMB 270 billion (about US$37.9 billion). As of the close of trading on September 2, CSSC was quoted at RMB 34.9 per share, with a total market capitalization of RMB 156.1 billion (about US$21.9 billion); CSIC was quoted at RMB 4.98 per share, with a total market capitalization of RMB 113.6 billion (about US$15.9 billion).

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