A shipyard under the China State Shipbuilding Corp delivers a large container ship from its base in North China's Tianjin Municipality on September 27, 2023. Photo: VCG

 
China CSSC Holdings and China Shipbuilding Industry Corp (CSIC) on Thursday detailed a plan to merge through a share swap to create the world's largest shipbuilder, in what analysts described as a milestone deal that could see Chinese shipyards' overall competitiveness on the global stage further rise. According to the plan, China CSSC Holdings will swap shares with CSIC at a ratio of 1:0.1335, in a mega deal valued at 115.15 billion yuan ($16.23 billion).

According to the China Securities Journal, this would be the largest merger deal in the history of Chinese A-shares. The new entity will be the global industry leader in terms of assets, revenue and order backlogs.

Zheng Ping, chief analyst at industry news portal chineseport.cn, told the Global Times on Thursday that the merger will reduce the number of state-owned shipyards to just one, making China's shipbuilding industry bigger and stronger via the elimination of ineffective competition. There will still be plenty of private-sector shipyards.

"There will be less ineffective competition, and Chinese shipyards will have a more powerful voice on the global stage, putting China on a firmer footing with its global rivals in the sector," Zheng said.

This merger also occurred amid efforts by the State-owned Assets Supervision and Administration Commission to beef up industrial and supply chain competitiveness.

Li Jin, chief researcher at the China Enterprise Research Institute in Beijing, told the Global Times on Thursday that promoting the integration and reorganization of state-owned enterprises (SOEs) to promote layout optimization and structural adjustment is the most important theme of SOE reform for the next five years.

"It is a vital step to better stimulate the internal growth drive and innovative vitality of the state-owned sector, and a means to further comprehensively deepen the reform of SOEs," Li said.