Concerns over the ownership of the Long Beach Container Terminal are holding up COSCO Shipping Holding’s acquisition of Orient Overseas International (OOIL), according to The Wall Street Journal (WSJ).
WSJ reported that the Committee on Foreign Investment in the US (CFIUS) is wary of the Chinese state-owned company taking control of the terminal, which is currently operated by Hong Kong’s OOIL on a long-term concession.
COSCO executives have met with CFIUS officials to cut a deal which could see the sale of the facility.
A person familiar with the matter told WSJ: “The Long Beach terminal is a prized asset, but it’s turning to be a roadblock to the completion of the deal, so it will likely be taken out of the equation. The plan is to sell it.”
The COSCO-OOIL takeover deal was announced in July, 2017 and if completed COSCO Shipping would leapfrog CMA CGM to become the third largest carrier in the world with a capacity of almost 2.64m teu.
If CFIUS were to hold up the US$6.3bn deal it would add to the torpedoing of Broadcom’s US$117bn takeover over of Qualcomm and Ant Financial Services Group’s purchase of MoneyGram International Inc., which were both sunk because of Broadcom’s and Ant Financial’s ties to China.