On the evening of July 18, China CSSC Holdings Limited (600150.SH) announced that its absorption and merger with China Shipbuilding Industry Company Limited (601989.SH) has received approval for registration from the China Securities Regulatory Commission (CSRC). This marks the final stage of the largest capital market operation in the history of China’s shipbuilding industry, as the “Chinese Shipbuilding Giant” accelerates its journey toward the A-share market.
**China CSSC Absorbs and Merges with China Shipbuilding Industry**
According to the CSRC’s approval, “the registration application for China CSSC Holdings Limited to absorb and merge China Shipbuilding Industry Company Limited by issuing 3,053,192,530 new shares is approved.” The merger must strictly adhere to the application documents submitted to the Shanghai Stock Exchange, and the approval is valid for 12 months from the date of issuance.
The share swap absorption and merger plan, released on the same day, designates China CSSC as the absorbing party and China Shipbuilding Industry as the absorbed party. Under the plan, China CSSC will issue A-shares to all shareholders of China Shipbuilding Industry in exchange for their holdings in the latter.
Specifically, the swap price for China CSSC is set at 37.84 yuan per share, based on the 120-day average trading price before the pricing benchmark date, while China Shipbuilding Industry’s swap price is set at 5.05 yuan per share under the same calculation. This translates to a swap ratio of 0.1335 China CSSC shares for every 1 China Shipbuilding Industry share.
After accounting for ex-rights and ex-dividend adjustments, the final swap ratio is 0.1339 China CSSC shares for every 1 China Shipbuilding Industry share.
**Building a World-Class Shipbuilding Enterprise**
China CSSC noted in its announcement that the global shipbuilding industry is experiencing a recovery, with key indicators such as global ship completions, new orders, and order backlogs continuously improving. This presents a critical development opportunity for shipbuilding enterprises.
Seizing this historic moment, as leading players in China’s shipbuilding sector, the merger between China CSSC and China Shipbuilding Industry will eliminate competition between the two, integrate their resources more effectively, and leverage synergies. This will enable the surviving entity to capitalize on the industry’s transformation and upgrading, positioning itself as a world-class shipbuilding enterprise and a global leader in the sector.
**Post-Merger Total Assets Exceed 400 Billion Yuan**
Annual report data shows that as of the end of 2024, China CSSC’s total assets stood at 181.977 billion yuan, while China Shipbuilding Industry’s totaled 222.138 billion yuan, bringing the combined entity’s total assets to 404.115 billion yuan.
In terms of performance, China CSSC reported operating revenue of 78.584 billion yuan in 2024, a year-on-year increase of 5.01%, with net profit attributable to shareholders reaching 3.614 billion yuan, up 22.21%. Meanwhile, China Shipbuilding Industry achieved operating revenue of 55.436 billion yuan, an 18.70% year-on-year increase, and turned a profit with net profit attributable to shareholders of 1.311 billion yuan.
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