The European Commission (EC) has approved COSCO’s acquisition of OOCL, the parent company of Orient Overseas International Ltd (OOIL).
The EC examined the impact of the proposed transaction on the markets where both OOIL and COSCO are active, mainly the deepsea container liner shipping services market. It said that if the market shares of the alliances or consortia that OOIL and COSCO belong to are taken into account, the transaction would affect eight trade routes – both legs of the northern Europe to North America, northern Europe to the Far East, Mediterranean to the Middle East and Mediterranean to the Far East trade routes.
The EC found that the combined market share of COSCO and OOIL and their consortia partners would be “very significant” on the northern Europe-North America trade route. However, the commission concluded that the proposed transaction would not give rise to competition concerns “given the presence of significant competitors post-merger”, the fact that the companies do not appear to be close competitors and COSCO's marginal position on the northern Europe-North America trade route.
It added “On the other trade routes where the companies' activities overlap, the transaction would not give rise to competition concerns because of the small increment brought about by the transaction and the presence of other significant competitors post-merger.”
The EC also looked at the effects of the transaction on related markets, in particular the market for container terminal services and freight forwarding, without finding any competition concerns.
It said that the transaction was examined under the normal merger review procedure.