Tianjin Port Development Holdings Ltd will pay $1.4 billion to merge with rival Tianjin Port Co Ltd.
Chinese firm Tianjin Port Development Holdings Ltd will pay $1.4 billion to merge with rival Tianjin Port Co Ltd, bringing about a consolidation of China's third-largest port, Tianjin.
Tianjin Port Development, which has been hit by the global financial crisis due to its exposure to the container business, said the deal would make its terminals more competitive.
''The re-organisation is a win-win deal; all the companies involved will see an enhancement on their per share earnings,'' Yu Rumin, chairman of Shanghai-listed Tianjin Port (Group), told reporters.
Tianjin Port Development is part of Tianjin Development Holdings Ltd, a unit of the Tianjin municipal government.
Tianjin Development will see it stake in Tianjin Port Development shrink to about 20% from more than 67%. Tianjin Port (Group) will hold 51% of Tianjin Port Development.
Both listed firms are major operators in Tianjin, a port in northern China. The port saw foreign trade fell nearly one-third in January as recession sank deeper in the US and Europe.
There had been speculation the Chinese government wanted to merge the two port companies to enhance competitiveness.
Yu had said earlier this month his company would invest $1.87 billion this year to build new berths and upgrade facilities in Tianjin port.