A 400 billion shipbuilding giant was born! China's divine ship is about to set sail
The merger transaction of the two major "flagship" listed companies with a market capitalization of 100 billion yuan under China Shipbuilding Group has taken a step further. China Shipbuilding and China Heavy Industry stocks will be suspended from the opening of the market on August 13. China Heavy Industry shares will not resume trading until the listing is terminated.
Previously, China Shipbuilding Industry Corporation (CSSC) planned to absorb and merge China Shipbuilding Industry Co., Ltd. (China Shipbuilding Industry Co., Ltd.) (China Shipbuilding Industry Co., Ltd.) by issuing A-shares to all shareholders of China Heavy Industries. The transaction has been issued by the China Securities Regulatory Commission on the Approval of China Shipbuilding Industry Co., Ltd. to absorb and merge the registration of China Shipbuilding Industry Co., Ltd.
In this transaction, China Shipbuilding is the absorbing and merged party, and China Heavy Industry is the absorbed and merged party. After the ex-dividend adjustment of the share exchange price between the two parties, the share exchange price of China Shipbuilding is 37.59 yuan per share, and the share exchange price of China Heavy Industry is 5.032 yuan per share, and the share exchange ratio is 1:0.1339, that is, each share of China Heavy Industry can be exchanged for 0.1339 shares of China Shipbuilding.
This transaction will result in China Heavy Industry no longer having the status of an independent entity and being cancelled, which falls under Article 9.7.1, Paragraph 1 (6) of the Shanghai Stock Exchange Stock Listing Rules (revised in April 2025) (hereinafter referred to as the "Listing Rules"), and can apply to the Shanghai Stock Exchange to voluntarily terminate the listing.
According to the provisions of the Listing Rules and the Self-Regulatory Guidelines for Listed Companies on the Shanghai Stock Exchange No. 2 - Business Handling (Revised in April 2025), China Heavy Industry will submit an application for voluntary termination of listing to the Shanghai Stock Exchange on the trading day following the deadline for cash option declaration.
According to the Listing Rules and other relevant business rules, the Shanghai Stock Exchange will make a decision on whether to accept the listing within 5 trading days after receiving the voluntary termination application documents submitted by China Heavy Industry, and make a decision on whether to agree to the termination of the listing of the company's shares within 15 trading days after acceptance. If the Shanghai Stock Exchange makes a decision to agree to the termination of the listing of China Heavy Industry's shares, the company will be delisted and terminated within 5 trading days from the date the Shanghai Stock Exchange announces the decision to terminate the listing of the company's shares. Voluntarily terminate the shares of listed companies and do not enter the delisting period for trading.
In order to ensure the smooth implementation of the cash options of dissenting shareholders, the shares of China Shipbuilding and China Heavy Industry will be suspended continuously from the opening of the market on August 13, 2025, the date of declaration of cash options by dissenting shareholders. Among them, China Heavy Industries' shares will not resume trading until the listing is terminated, and August 12, 2025 will be the last trading day of China Heavy Industries' A-share shares.
China Shipbuilding said that the number of shares held by dissenting shareholders who can declare the exercise of the right to request takeover is expected to be no more than 18,538,500 shares. The exercise price of the dissenting shareholder's acquisition request right in this transaction is 30.02 yuan per share. On August 4, the closing price of China Shipbuilding's shares was 34.04 yuan per share, a premium of 13.39% compared with the exercise price of the acquisition request.
After the Shanghai Stock Exchange approves the application for termination of listing, China Heavy Industry will publish an announcement on the termination of listing, and China Shipbuilding will issue an announcement on the implementation of the share exchange and determine the equity registration date for the implementation of the share exchange. Subsequently, China Heavy Industry terminated its listing, and China Shipbuilding began to implement share exchanges.
It is understood that in September last year, China Shipbuilding and China Heavy Industry jointly issued a restructuring transaction plan, with an amount of up to 115.150 billion yuan. This restructuring transaction is the largest restructuring project in the history of the A-share capital market so far, and it is also the largest business combination case in the global shipbuilding industry so far.
After the completion of this share exchange and absorption merger, China Heavy Industry will terminate its listing and cancel its legal personality, and China Shipbuilding will inherit and undertake all assets, liabilities, business, personnel, contracts and all other rights and obligations of China Heavy Industry. As a surviving company, China Shipbuilding will have total assets of more than 400 billion yuan and annual revenue of more than 130 billion yuan, making it the world's largest and most complete listed shipbuilding giant.
China Shipbuilding and China Heavy Industry are both listed companies in the core military and civilian products of China Shipbuilding Group. Among them, China Shipbuilding focuses on the application of shipbuilding equipment and marine technology, and its main business includes shipbuilding business (military, civilian), ship repair business, marine engineering and mechanical and electrical equipment, etc., and its main products are military ships, container ships, bulk carriers, liquefied gas carriers, large cruise ships, military auxiliary ships, special ships, offshore auxiliary ships and other mechanical and electrical equipment. The main business entity is Jiangnan Shipbuilding, Waigaoqiao Shipbuilding, CSSC Chengxi and Guangzhou Shipbuilding International, which is the largest, most technologically advanced and most complete shipbuilding flagship listed company in China.
China Heavy Industry is mainly engaged in ship R&D, design and manufacturing business, covering marine defense and marine development equipment, marine transportation equipment, deep-sea equipment and ship repair and modification, ship supporting and mechanical and electrical equipment, strategic emerging industries and others; The main products include marine defense equipment, marine transportation equipment, marine scientific research equipment and marine development equipment. It has internationally renowned modern shipbuilding enterprises such as Dalian Shipbuilding, Wuchang Shipbuilding, and Beihai Shipbuilding.
In 2024, China Shipbuilding will undertake a total of 154 ship orders of 12.7246 million dwt, and China Heavy Industry will undertake a total of 103 new ship orders of 15.8995 million dwt. The two companies undertook a total of 257 new ship orders of 28.6241 million deadweight tons last year. According to Clarkson's data, there will be a total of 2,412 new ship orders in 2024, about 170 million dwt, and China Shipbuilding and China Heavy Industry won 16.84% of the world's new ship orders last year.
After the completion of this merger, China Shipbuilding will integrate high-quality assets such as Dalian Shipbuilding, Wuchang Shipbuilding, and Beihai Shipbuilding under China Heavy Industry, promote the collaborative optimization of shipbuilding and supporting businesses owned by China Shipbuilding Co., Ltd. and China Heavy Industry, and have the strength to reshape the industry pattern from asset scale, technical strength, delivery capacity to global market share, and will gather the joint efforts of all parties in the capital market to build a valuation logic of global scarcity leading enterprises.
In addition, in order to further avoid competition in the industry, China Shipbuilding Group promised to divest the assets of Hudong Zhonghua within three years, so that Hudong Zhonghua meets the conditions for injecting into listed companies. Hudong Zhonghua is one of the world's leading shipbuilding enterprises, currently 100% owned by China Shipbuilding Group, mainly engaged in shipbuilding and marine engineering business, the main products include defense equipment, large LNG ships, super-large container ships, marine engineering and special ships, etc.
