Wednesday, July 3, 2019

State Shipbuilders in China

According to an article in today's Wall Street Journal (China to Weld Its Biggest Shipbuilders Into Single State-Run Giant) China is about to combine its two largest shipbuilders, China Shipbuilding Industry Corp. (CSIC) and China State Shipbuilding Corp. (CSSC).  China already has 43% of the world market. 

It looks like size matters in shipbuilding.  S.Korea has a merger of its own (Hyundai Heavy Industries and Daewoo Shipbuilding and Marine Engineering Co.).  China is combining to more than match what S.Korea, their main competitor, is trying to do.   

All of this is part of a global move towards consolidation using Mergers and Acquisitions.  Apparently big in shipbuilding is not the only consolidation taking place.  The US telecoms are certainly trying to do similar things and pharmas are doing the same thing.  The U.S. has been reluctant to let these go through because it feels some of these affect national security, a problem China doesn't have. 

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