(July 9): Cosco Shipping Holdings agreed to buy Orient Overseas International for US$6.3 billion ($8.7 billion) in cash, creating the world’s third-largest container-shipping company as the industry shrinks after years of losses and overcapacity.

Cosco, China’s biggest container carrier, will pay shareholders of Hong Kong’s No. 1 box mover HK$78.67 ($13.92) a share, a 31% premium over the stock’s closing price July 7, it said in an exchange filing Sunday. The Tung family, which controls Orient Overseas, has accepted the offer that still needs regulatory approvals and consent from Cosco’s investors.

The combined entity will only lag behind A.P. Moller-Maersk A/S and Mediterranean Shipping Co. by capacity as container lines from Denmark to Japan pursue acquisitions and become bigger amid a plunge in rates to move toys and computers. Too many ships and companies chasing the same trade led to a collapse in freight rates and burgeoning losses, factors that pushed Hanjin Shipping Co. into bankruptcy last year, stranding cargo ahead of the holiday-season.

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