The European Union competition watchdog said a trustee will monitor both companies to ensure there is no information sharing between the Ocean3 and G6 ocean carrier alliances, of which CMA CGM and Neptune Orient Lines subsidiary APL are currently members.
The European Commission’s competition directorate has cleared the proposed acquisition by France’s CMA CGM of Singapore-based Neptune Oriental Lines and its APL container shipping subsidiary, the European Union watchdog said Friday.
The clearance is conditional upon APL leaving the G6 ocean carrier alliance by April of next year.
“Container liner shipping plays a central role in global trade, so competition in this sector is essential for businesses and consumers in the EU,” Commissioner Margrethe Vestager, in charge of competition policy, said in a statement. “Today’s decision ensures that the takeover will not lead to price increases for the many EU companies using these container shipping services.”
CMA CGM is a founding member of the Ocean3 Alliance along with China Shipping and United Arab Shipping Co., while APL is currently a member of the G6 Alliance, which also include Hapag Lloyd, MOL, NYK, OOCL and HMM.
The commission said membership in two consortia would have resulted in anti-competitive effects on trade routes between Northern Europe and North America as well as between Europe and the Middle East because on those routes, “competition from liner shippers who have no connection with the merged entity or its alliance partners would have been insufficient.”
Although CMA CGM had previously stated publicly that it intended to remove APL from the G6 Alliance following completion of the deal, the competition directorate said formal commitment to do so was necessary to remove the risk of anti-competitive effects on the two trade routes described above.
CMA CGM said last week that next April, after APL leaves the G6, it plans to form a new consortium with the recently merged COSCO China Shipping, OOCL and Evergreen. It is calling that vessel sharing agreement simply the OCEAN Alliance.
The European Commission said although APL will continue to operate for G6 until March 31, 2017, “to guarantee an orderly exit, the commitments foresee that a trustee will ensure that no anti-competitive information is shared between the alliance and the merged entity during that remaining period. This will eliminate the potential additional links between previously unrelated consortia that the merger would have created on the two routes.”
CMA CGM said with the approval from the EC, it and NOL “will continue to cooperate with the remaining authorities to close their reviews as quickly as possible.” The Marseilles, France-based company said its voluntary general cash offer for NOL will be launched when approvals from all relevant antitrust authorities have been satisfied or waived.
NEWS FLASH: European Commission okays CMA CGM purchase of NOL/APL
