CMA CGM, French leading shipping line has obtained firm commitments from BNP Paribas Group, HSBC Holdings PLC. and J.P. Morgan & Chase Co finance the merge of NOL, Singapore’s Neptune Orient Lines for a market value of us$ 2.2 billion, according to insiders information.
Marseille based CMA CGM is the world’s third-largest container ship operator by capacity, entered last month into exclusive talks with NOL’s largest shareholder, Temasek Holdings Pte. Ltd., to buy a 67% stake in the Singapore-listed firm. If CMA CGM succeeds in acquiring the stake, it will eventually lead to an offer for all of NOL.
The offer could include us$3 billion in NOL’s debt. NOL has a market capitalization of close to us$2 billion. A deal would allow Temasek to exit from a company that has been incurring losses for many years. Family-owned CMA CGM takeover of NOL would boost its position on transpacific routes at a time when operators are struggling with overcapacity and low freight rates.
The sale of Temasek’s stake could lead to the de-listing of NOL, whose APL unit is ranked as the world’s 13th-biggest container shipping firm. If the acquisition goes through, it would be one of the biggest tie-ups between container-shipping lines in recent years and would mark a rare consolidation in a fragmented industry.
The takeover would not change CMA CGM’s global ranking, but it would enable the combined entity to dominate the transpacific lanes with a 12% share ahead of the 9% of global market leader Maersk Line.