(Yicai) Sept. 19 -- The planned merger between two units of China State Shipbuilding Corporation to create the world's largest publicly listed shipbuilder will be a share swap deal worth almost CNY115.2 billion (USD16.2 billion), according to one of the units.

China CSSC Holdings will absorb China Shipbuilding Industry Corporation by issuing a total of three billion new shares to CSIC investors, the former announced yesterday. The share-swap price was set to CNY37.84 (USD5.35) per CSSC Holdings share and CNY5 (71 US cents) per CSIC share, meaning that CSIC investors will receive 0.1335 share of CSSC Holdings for each CSIC share they own.

To protect the rights and interests of shareholders of both companies, the merger deal includes a cash-based option for those disagreeing with the share-swap price, CSSC Holdings noted. The cash option for investors of CSSC Holdings is CNY30.27 per share, while that for investors of CSIC is CNY4.04 per share.

CSSC and the State Council's State-Owned Assets Supervision and Administration Commission will remain the controllers of CSSC Holdings after the absorption of CSIC.

The new entity will be a global leader in terms of assets, revenue, and order backlog, cementing China's position as the world's largest shipbuilding nation, according to industry insiders.

The planned combination of CSSC Holdings and CSIC is part of a broader trend in China of consolidating state-owned enterprises to enhance their competitiveness on the global stage.

The two companies suspended trading on Sept. 3 when the merger deal was first unveiled. They resumed trading today. CSSC Holdings [SHA: 600150] rose 1.2 percent to CNY35.32 as of lunch break. CSIC [SHA: 601989] fell 4.2 percent to CNY4.77.

CSSC Holdings focuses on the large-scale shipbuilding, repair, electromechanical equipment, and marine engineering businesses. It has four subsidiaries: Jiangnan Shipyard Group, Shanghai Waigaoqiao Shipbuilding, CSSC Chengxi Shipyard, and Guangzhou Shipyard International.

In the first half of the year, CSSC Holdings reported CNY1.4 billion (USD196.6 million) in net profit and CNY36 billion (USD5.1 billion) in revenue, up 155 percent and 18 percent, respectively, from a year earlier.

CSIC focuses on the research, design, and manufacturing of marine defense, transport, research, and development equipment. Its net profit surged 177 percent to CNY532 million (USD74.7 million) in the six months ended June 30 from a year earlier, while revenue jumped 31 percent to CNY22.1 billion.

Editor: Futura Costaglione