U.S. review body grants security clearance to Cosco for OOIL deal

COSCO Shipping Holdings’ has apparently received a green signal from a renowned U.S. national-security review body for its OOIL deal. Reportedly, the U.S. review panel has given the Chinese shipping giant a security clearance for its planned acquisition of a Hong Kong based rival company, Orient Overseas International Ltd in a deal of USD 6.3 billion.

Cosco’s takeover of OOIL seems to be in line with the increasing trend of mergers & acquisitions in global container shipping market, allowing the top six players to account for almost 63% of the overall share. Also, the time at which the acquisition gets a legal sanction is rather quite significant as the business space is trying to revive itself after many years of downturn.

For the record, there had been major concerns over the trade fight between Washington and Beijing, which could have end up in hampering major Chinese and U.S. deals that seek regulatory approvals.  Allegedly, China and U.S. have both implemented high tariff rates on each other’s goods with no sign of near-term resolution.  With this acquisition of OOIL, the Chinese firm has become the third largest container shipping line in the world, cite sources.

According to a statement from COSCO, the U.S. Committee on Foreign Investment had informed the company that they do not have any outstanding security issues in relation to the deal. The security clearance apparently comes on the heels of Cosco’s agreement with the U.S government in which the company agreed to divest its Long Beach container terminal business to a third party.

As per the official confirmation, Cosco had already met all the prerequisite conditions for the OOIL deal last year, after it received an approval from the Chinese anti-monopoly regulator. For the records, the deal already boasts of anti-regulatory approvals from the United States and Europe.