The French ocean carrier reported it will pay 1.3 Singapore dollars (U.S. $0.94) for the Neptune Orient Lines’ shares it does not already own, control or has agreed to acquire.
Ocean carrier CMA CGM said it is moving forward with its plan to acquire Singapore-based Neptune Orient Lines, the parent company of container carrier APL.
The proposed acquisition for an estimated $2.4 billion was initially announced in December 2015.
The French carrier said that conditions in its original announcement have been satisfied or waived, and it will pay 1.3 Singapore dollars (U.S. $0.94) for the NOL shares it does not already own, control or has agreed to acquire. The price represents a 48.6 percent premium over the price at which NOL shares were trading on the last full day of trading in NOL shares on the Singapore Stock Exchange immediately preceding the announcement of a potential sale of NOL.
Temasek Holdings, Lentor Investments and Startree Investments, companies affiliated with the Singapore government, have pledged to tender 66.78 percent of NOL shares.
CMA CGM said in its offer announcement the acquisition “will create a new global force in shipping which will, based on information as at the end of the first quarter of 2016 of CMA CGM Group and NOL Group respectively, have a capacity of approximately 2.35 million TEUs, a market share of approximately 11.7 percent, a fleet of approximately 540 vessels and, based on information as at the end of the financial year in respect of 2015, a combined annual turnover of approximately $21 billion.”
Shippers “will have access to an enlarged and well balanced shipping coverage across the strategic trades of global commerce, and to an extended range of products and services,” CMA CGM said.
In addition, CMA CGM confirmed remarks it made last year, saying said it “attaches significant importance to Singapore and the region for the deployment of its strategy in Asia and intends to maintain high transit volume in Singapore” and plans to “expand and strengthen its presence in Singapore.”
However, CMA CGM did say it “intends to perform a strategic review encompassing both the NOL Group and the current CMA CGM Group with a view to deleveraging the combined Group further to the offer with the objective to sell assets in the aggregate amount of at least US$1 billion.”
“Further to this strategic review, CMA CGM may also consider redeploying certain ships amongst trade lanes with a view to optimising fleet usage,” CMA CGM said.
In addition, CMA CGM plans to make Nicolas Sartini chief executive officer of NOL, while NOL’s current CEO and Group President, Ng Yat Chung, will remain an executive director.
Currently, CMA CGM said it has no intention to introduce any major changes to the business of NOL, redeploy the fixed assets of NOL or discontinue the employment of the employees of NOL “other than in the ordinary and usual course of business.”
However, the carrier noted it “retains the flexibility at any time to consider any option in relation to the group…not limited to, reorganization in connection with integration.”
CMA CGM moves forward with NOL/APL acquisition
