France’s CMA CGM SA is in exclusive talks to buy Singapore’s Neptune Orient Lines Ltd, the shipping company and Temasek Holdings Ltd, its largest shareholder, said recently.
A deal would bring together the third-largest container company in the world, with South-East Asia’s biggest container shipper. CMA CGM has exclusivity until 7 December, to complete due diligence and negotiate the definitive agreements for the offer, Neptune Orient said in a statement to Singapore’s stock exchange.
Neptune Orient shares have risen 7.2 per cent in the past two weeks, after the company said that it was in separate talks with CMA CGM and Danish conglomerate A.P. Moeller-Maersk A/S on a possible sale. Singapore’s benchmark Straits Times Index lost 3.1 per cent during the period.
Liners including Neptune Orient have been reducing costs, selling assets and cutting employees to stem years of losses as sluggish global commerce and overcapacity that have eaten into shipping rates. Neptune Orient, which helped cement Singapore’s status as a global trade hub, attracted takeover interest after simplifying its structure this year by shedding its $1.2-billion logistics unit. Temasek owns 67 per cent of Neptune Orient.
Acquiring Neptune Orient would help consolidate CMA CGM’s position in the global container market, along with Maersk and Mediterranean Shipping Co. Neptune Orient’s APL container unit has a 2.7-per-cent market share, while CMA CGM controls 8.9 per cent of the market, according to data from industry consultant Alphaliner.
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