Tung Chee-hwa's shipping empire: Orient Overseas sold for $33.8 billion in 2017

Tung Chee-hwa's shipping empire: Orient Overseas sold for $33.8 billion in 2017

Tung Chee-hwa's family shipping empire, Orient Overseas, once one of the world's largest shipping groups, was sold for about HK$33.8 billion in 2017, marking the family's complete exit from the shipping industry.

The rise of a shipping empire

The history of Orient Overseas began with Tung's father, Tung Chao-yung, who was born in Zhejiang in 1912. After his father's business failed, he was forced to drop out of school and went to work at a dock in Tianjin. There, he caught the attention of shipping magnate Goo Chung Shui, who saw potential in the young man and eventually married his daughter Goo Li-chen to him in 1932.

After years in the shipping industry, Tung Chao-yung saw opportunity in the post-war global shortage of cargo ships. He founded Chinese Maritime Transport Company. in 1946 and built up a fleet that grew rapidly with the economic boom in Southeast Asia. In 1969, he established Orient Overseas and listed it in Hong Kong in 1973.

At its peak in the late 1970s, the company operated nearly 150 vessels with a carrying capacity of 12 million tonnes, with routes spanning the globe. Tung Chao-yung was ranked among Hong Kong's "Four Shipping Tycoons" alongside Pao Yue-kong, Chao Tsong-yea and Frank Tsao Wen-king, and was also named among the world's seven shipping magnates.

Crisis and recovery

After Tung Chao-yung retired in 1980 and passed away in 1982, the company fell into deep debt. Tung Chee-hwa took over and spent 10 years turning the business back to profitability by 1992.

The sale

In July 2017, Orient Overseas International (0316) announced that its controlling shareholder, the Tung family, would sell a 68.7 per cent stake to COSCO Shipping Holdings (01919) and Shanghai International Port Group. The acquisition was valued at HK$49.23 billion if all shareholders accepted the offer. Based on the HK$60 share price at the time, the Tung family was reported to have cashed out about HK$33.8 billion.

After the transaction was completed, the Tung family completely exited the shipping industry.

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