France’s CMA CGM SA is in talks to acquire Singapore container shipping company Neptune Orient Lines, as majority owner Temasek Holdings seeks a buyer, people with knowledge of the matter said.
CMA CGM has made a preliminary offer for Neptune Orient, which has a market value of $2.7 billion, two of the people said, asking not to be identified as the information is private. The Marseille-based company is now conducting due diligence, though it hasn’t been granted exclusivity, according to one of the people. Denmark’s A.P. Moeller-Maersk A/S is also in talks about an acquisition of Neptune Orient, though the discussions are less advanced, the people said.
A deal is unlikely to be struck soon, as the slumping shipping sector damps the appetite for aggressive bidding, two of the people said. Temasek, the Singapore state investment company that owns 67% of Neptune Orient, may not be willing sell its stake at a low price, they said.
The shipping company that helped cement Singapore’s status as a global trade hub is attracting takeover interest after simplifying its structure earlier this year by selling its US$1.2 billion ($1.7 billion) logistics unit. Neptune Orient, created in 1968 and now Southeast Asia’s largest container line, ran up US$1.2 billion of losses in the last four financial years as sluggish global commerce and overcapacity ate into shipping rates.
Acquiring Neptune Orient would help consolidate CMA CGM’s No. 3 position in container shipping as it competes with market leaders Mediterranean Shipping Co. and Maersk. Neptune Orient’s APL container unit has a 2.7% market share, while CMA CGM controls 8.9% of the market, according to data from industry consultant Alphaliner.
CMA CGM, founded in 1978, has a fleet of 467 vessels transporting 12.1 million twenty-foot equivalent units of cargo annually, according to its website. Representatives for CMA CGM, Neptune Orient and Temasek declined to comment.
“We’ve always said that we will look at everything that comes up for sale in the market but our base strategy is to grow organically,” Maersk Chief Executive Officer Nils Smedegaard Andersen said in a phone interview Friday, declining to comment specifically on whether Maersk is looking at Neptune Orient. “In general we welcome any consolidation -- that would only be healthy for the container line industry.”
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CMA CGM has made a preliminary offer for Neptune Orient, which has a market value of $2.7 billion, two of the people said, asking not to be identified as the information is private. The Marseille-based company is now conducting due diligence, though it hasn’t been granted exclusivity, according to one of the people. Denmark’s A.P. Moeller-Maersk A/S is also in talks about an acquisition of Neptune Orient, though the discussions are less advanced, the people said.
A deal is unlikely to be struck soon, as the slumping shipping sector damps the appetite for aggressive bidding, two of the people said. Temasek, the Singapore state investment company that owns 67% of Neptune Orient, may not be willing sell its stake at a low price, they said.
The shipping company that helped cement Singapore’s status as a global trade hub is attracting takeover interest after simplifying its structure earlier this year by selling its US$1.2 billion ($1.7 billion) logistics unit. Neptune Orient, created in 1968 and now Southeast Asia’s largest container line, ran up US$1.2 billion of losses in the last four financial years as sluggish global commerce and overcapacity ate into shipping rates.
Acquiring Neptune Orient would help consolidate CMA CGM’s No. 3 position in container shipping as it competes with market leaders Mediterranean Shipping Co. and Maersk. Neptune Orient’s APL container unit has a 2.7% market share, while CMA CGM controls 8.9% of the market, according to data from industry consultant Alphaliner.
CMA CGM, founded in 1978, has a fleet of 467 vessels transporting 12.1 million twenty-foot equivalent units of cargo annually, according to its website. Representatives for CMA CGM, Neptune Orient and Temasek declined to comment.
“We’ve always said that we will look at everything that comes up for sale in the market but our base strategy is to grow organically,” Maersk Chief Executive Officer Nils Smedegaard Andersen said in a phone interview Friday, declining to comment specifically on whether Maersk is looking at Neptune Orient. “In general we welcome any consolidation -- that would only be healthy for the container line industry.”
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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