CMA CGM has made a pre-conditional voluntary cash offer to purchase Neptune Orient Lines for S$1.30 (US$0.92) per share, for a total of approximately US$2.4 billion.
Subject to approval from the authorities which is expected to be granted by mid-2016, NOL’s majority shareholder, state-owned Temasek Holdings, has irrevocably undertaken to accept the offer.
Rodolphe Saadé, vice chairman of CMA CGM, said that the transaction would represent a significant milestone in the development of the Marseille-based shipping line.
“Leveraging the complementary strengths of both companies, CMA CGM will further reinforce its position as a leader in global shipping with combined revenue of US$22 billion and 563 vessels,” said Saadé. “By bringing together the know-how of both teams, the enlarged group will be even better positioned to provide premium services to its customers across all markets. At a time when the shipping industry is facing strong headwinds, scale is more critical than ever to capitalize on synergies and capture growth opportunities wherever they arise.”
He added that he was committed to reinforcing the strategic importance of Singapore as a key maritime hub.
With the acquisition of NOL, which is currently the world’s 12th-largest shipping line, CMA CGM maintains its position as the third-largest ocean carrier in the world, behind Maersk and MSC.
According to CMA CGM, the acquisition would result in a combined fleet of 563 vessels with a total capacity of 2,399,000 TEUs, and a market share of about 11.5%.
With slowing economies, overcapacity and other challenging operating conditions, the shipping industry is facing further consolidation. China Shipping Container Lines and Cosco Container Lines, which both suspended the trading of shares in August 2015, are in advanced discussions to form the fourth-largest ocean carrier in the world.