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CMA to buy NOL
[ December 7, 2015 // Chris ]CMA CGM is to acquire Singapore-based rival container shipping operator Neptune Orient Lines (NOL) for S$1.30 a share, in a transaction that has been unanimously approved by the NOL Board. It will result in a company with a combined turnover of U$22 billion and a fleet size of 563 vessels with a capacity of almost 2.4 million teu, said the French-based line. The move will result in “significant operational synergies” it added. CMA CGM will set up a regional head office in Singapore.
CMA CGM will be paying a 49% premium to NOL’s unaffected share price, it added. NOL’s majority shareholders (Temasek and its affiliates) have agreed to accept the offer.
Vice-chairman of CMA CGM, Rodolphe Saadé, said: “This transaction will represent a significant milestone in the development of CMA CGM. 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. 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. I firmly believe CMA CGM will enable NOL to address the industry’s new challenges. We recognise the strategic importance of Singapore as a key hub for the maritime industry and we are committed to reinforcing its regional leadership.”
NOL chief executive, Ng Yat Chung, CEO of NOL, added: “The combined market presence delivered by the transaction would achieve the scale needed to enhance competitiveness for NOL’s operations and offer a clear and sustainable long term direction for the combined entity. The transaction would enable NOL to grow as part of a larger entity with the resources of the world’s third largest container shipping line.”
Head of portfolio management at Temasek, Tan Chong Lee, said: “We are supportive of this transaction as it presents NOL with an opportunity to join a leading player with an extensive global presence and solid operational track record. The combination of NOL and CMA CGM will create a leading shipping company that delivers reliable and efficient service to its customers. Their complementary strengths will yield mutually beneficial results. We also note and welcome the commitment of CMA CGM to enhance Singapore’s position as a key maritime hub and grow Singapore’s container throughput volumes.”
Founded in 1978 by Jacques Saadé, CMA CGM is currently the world’s third largest container shipping firm, with 469 vessels and a global market share of 8.8%. It is a founding member of the Ocean Three Alliance with UASC and CSCL.
NOL operates under the American President Lines (APL) brand, which will be retained, and had revenues of US$7.04 billion in 2014. It operates 94 vessels, totalling 618,000teu.
The combined line would have a market share of about 11.5% compared with 8.8% for CMA CGM and 2.7% for NOL.