Monday, November 23, 2015

Two Shipping Giants Negotiate for Container Freight Amalgamation

Maersk Drops Out of Talks as CMA CGM and NOL Discuss Deal
Shipping News Feature
FRANCE – SINGAPORE – Following our story of November 10, container shipping lines CMA CGM and Neptune Orient Lines (NOL), owner of the APL ocean shipping brand, have confirmed they are now in exclusive takeover talks with each other. Two weeks ago both Maersk Line and the French firm, largest and third largest box freight carriers in the world respectively, were looking at a link up with the Singaporean outfit but the Danish company now seems to have lost interest.

NOL shares rose at the news but, as we previously reported, the company has been stemming a flow of losses, resorting to selling off assets such as the sale of APL Logistics and the principal stockholder, Temasek Holdings, owned by the Government of Singapore, seems keen to offload the carrier. Last month NOL reported a 3Q 2015 net loss of US$96 million, compared to a net loss of US$23 million in 3Q 2014.

Although Maersk would make no comment on its reasons for backing off, CMA CGM seem keen on a venture which would see a group almost as large as the number two in the industry, Mediterranean Shipping Company (MSC). In a statement CMA CGM said:

“CMA CGM confirms that it has entered into exclusive discussions with Neptune Orient Lines Limited (NOL) and Lentor Investments Pte. Ltd. (a wholly-owned subsidiary of Temasek Holdings (Private) Limited), its controlling shareholder, with respect to a potential combination with NOL. The exclusivity period is expected to run until December 7th, 2015.

“Should these discussions lead to an agreement, such a combination would contribute to the consolidation of the container shipping industry, at a time when scale is more critical than ever. It would further reinforce CMA CGM as a global force in container shipping, leveraging the strong geographic and operational complementarity of both groups.

“No agreement has yet been reached and no assurance can be given that these discussions will lead to a definitive agreement. CMA CGM will inform the public of any material developments in due time.”