Temasek to Sell Entire NOL Stake for $1.61 Billion
Singapore sovereign wealth fund Temasek Holdings has agreed to sell its entire 67 percent stake in Neptune Orient Lines (NOL) to France’s CMA CGM, the world’s third-largest container shipper.
CMA CGM will pay S$1.30 a share in cash for the 2.6 billion shares in NOL, 6 per cent above the last closing price on the Singapore Exchange, and a 33 per cent premium to the three-month volume-weighted average price to July 16.
Temasek has accepted the offer. Tan Chong Lee, Head of Portfolio Management at Temasek 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… Their complementary strengths will yield mutually bene-ficial results. We also note and welcome the commitment of CMA CGM to enhance Singapore’s posi-tion as a key maritime hub and grow Singapore’s container throughput volumes.”
NOL is a leading shipping company operating under the American President Lines (APL) brand. CMA CGM SA's offer will value NOL at S$3.4 billion. It will establish its regional head office in Singapore, which will reinforce Singapore’s leadership position in the shipping industry
The offer comes amid a prolonged downturn in the global shipping market caused by overcapacity, slowing global growth and weak commodity prices.
The merger between NOL and privately-held, family-owned CMA would be the biggest container shipping deal in years.
The deal is a sign of further consolidation in the global shipping industry on the back of a collapse in freight rates as growth in China slows, reducing the country's appetite for commodities just as a backlog of large vessels come into service.
Commenting on this transaction, Rodolphe Saadé, Vice-Chairman of CMA CGM, 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 USD 22 billion2 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.”
