NOL in Acquisition Talks with CMA CGM, Maersk

Maritime Activity Reports, Inc.

November 9, 2015

Photo: Neptune Orient Lines Ltd

Photo: Neptune Orient Lines Ltd

 Neptune Orient Lines Ltd (NOL)  has officially confirmed that it is a takeover target of two separate companies: French shipping company CMA CGM and Danish conglomerate AP Moeller-Maersk. 

 
As per a report in the Business Times, NOL said in an announcement on Saturday evening that it was in preliminary talks with the two "with respect to a potential acquisition of NOL".  
 
"There is no assurance that any such discussions will result in any definitive agreement or transaction, or that any offer for NOL will be made or as to the terms on which any such offer might be made," it said.
 
The firm has been looking for a buyer for months. 
 
NOL, controlled by Singapore’s state investor Temasek Holdings, has been struggling in a prolonged downturn in the global shipping market. It has posted four years of consecutive losses.
 
Last month, Neptune Orient reported that its third quarter net loss widened to $96.1 million from $23.1 million last year. In the latest period, revenue declined 28% year-over-year to $1.21 billion.
 
Earlier this year, NOL sold off its logistics business -  APL Logistics Ltd - for $1.2 billion to Japanese freight carrier Kintetsu World Express Inc, and has been said to be looking to selling the rest of the company ever since.
 
“NOL has a duty to assess all options to maximize shareholder value and improve its competitiveness,” the company said in a statement.
 
The addition of NOL’s ships, routes and infrastructure in Asia could provide a significant boost for either Maersk or CMA CGM—assuming the price is right. NOL is highly indebted and, amid the downturn, unprofitable.
 
CMA CGM also confirmed in an email statement that it is in discussions with NOL. “Given the early stage of those discussions, there is no certainty that a transaction will actually occur,” an external spokesperson for the company said.
 
According to local media reports, CMA CGM has made a preliminary offer for Neptune Orient, which has a market value of S$2.7 billion, people with the knowledge said earlier, asking not to be identified as the information is private. 
 
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