CMA CGM has agreed a deal to buy Singapore-based Neptune Orient Lines in a deal that will produce a business with some 11.5 per cent share of the container market, consolidating its third place behind Maersk and MSC.
CMA CGM it is offering S$1.30 (£0.61) per share for NOL. With 2.6bn NOL shares outstanding, according to Bloomberg, this values the business at about S$3.38bn (£1.6bn).
The combined company will have a turnover of $22 billion, and a fleet of 563 vessels.
CMA CGM plans to locate its regional head office in Singapore – which the company has said will “reinforce Singapore’s leadership position in the shipping industry”.
“At a time when the shipping industry is facing strong headwinds, scale is more critical than ever to capitalise on synergies and capture growth opportunities wherever they arise,” said Rodolphe Saadé, vice-chairman of CMA CGM. “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.”
Tan Chong Lee, head of portfolio management at Temasek, the majority shareholder at NOL, 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.”