CMA CGM to acquire Neptune Orient Lines

CMA CGM, a global leader in container shipping, today announces a pre-conditional voluntary general cash offer for Neptune Orient Lines (NOL), Southeast Asia’s largest container shipping company (SGX: N03), subject to the satisfaction of the pre-conditions specified in such announcement. NOL’s majority shareholders (Temasek and its affiliates) have irrevocably undertaken to tender all of their shares in acceptance of the Offer.
Upon the satisfaction of the pre-conditions (namely, approvals from antitrust authorities), CMA CGM will launch an offer at a price of SGD 1.30 per share, which represents a 49% premium to NOL’s unaffected share price1 and a 33% premium to NOL’s 3 month volume-weighted average share price to July 16, 2015.
Commenting on this transaction, Rodolphe Saadé, Vice-Chairman of CMA CGM, says: “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 billion 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.”
Ng Yat Chung, CEO of NOL, adds: “The combined market presence delivered by the transaction would achieve the scale needed to enhance competitiveness for NOL’s operations and offer a clear and sustainable long term direction for the combined entity. The transaction would enable NOL to grow as part of a larger entity with the resources of the world’s third largest container shipping line.”
Created in 1978 by Jacques Saadé, CMA CGM is the world’s third largest container shipping firm, with 469 vessels and a global market share of 8.8%. In 2014, the Group handled over 12 million TEUs and generated USD 16.74 billion in revenues. A founding member of the Ocean Three Alliance with UASC and CSCL, CMA CGM is present across 160 countries, with 22,000 employees in 655 offices, and has a fleet capacity of 1,781 thousand TEUs.
NOL is a leading shipping company operating under the American President Lines (APL) brand. In 2014, the company’s revenues2 reached USD 7.04 billion. Currently, NOL has more than 7,400 employees in 180 offices across more than 80 countries and operates 94 vessels, representing 618 thousand TEUs in fleet capacity.
This acquisition would enable CMA CGM to reinforce its position in the container shipping industry, and achieve the following:
• capacity of 2.4 million TEUs and combined fleet of 563 vessels
• market share of approximately 11.5% (vs 8.8% for CMA CGM and 2.7% for NOL)
• combined turnover of USD 22 billion.
CMA CGM has a leading position on the Asia-Europe, Asia-Mediterranean, Africa and Latin America routes, whilst APL is strong along the Transpacific, Intra-Asia and Indian subcontinent shipping routes. The enlarged entity will strengthen its position on strategic shipping routes, especially in key markets such as United States, Intra-Asia and Japan, and will boast a balanced trade portfolio. Following the transaction, the combined group would hold market shares from 7% to 19% on the routes on which it operates.
CMA CGM is looking forward to welcoming APL into CMA CGM’s world and intends to retain and develop the APL brand. With a historic presence in the US, APL would add to CMA CGM’s operations in this region.
The transaction will be financed by a combination of available cash and bank financing provided by a syndicate of international banks. Post-closing, CMA CGM intends to deleverage its balance sheet within 18 to 24 months through synergies and assets sales for an amount of at least USD 1 billion, with the aim to reduce debt gearing ratio to below 0.8 times.
Created in 1978 by Jacques Saadé, CMA CGM is the world’s third largest container shipping firm, with 469 vessels and a global market share of 8.8%. In 2014, the Group handled over 12 million TEUs and generated USD 16.74 billion in revenues. A founding member of the Ocean Three Alliance with UASC and CSCL, CMA CGM is present across 160 countries, with 22,000 employees in 655 offices, and has a fleet capacity of 1,781 thousand TEUs.
NOL is a leading shipping company operating under the American President Lines (APL) brand. In 2014, the company’s revenues2 reached USD 7.04 billion. Currently, NOL has more than 7,400 employees in 180 offices across more than 80 countries and operates 94 vessels, representing 618 thousand TEUs in fleet capacity.
www.cma-cgm.com  www.nol.com.sg