French shipping giant CMA CGM said it now owns about 78% of all shares of Neptune Orient Lines (NOL), as it moves closer to taking over the Singapore carrier.
The Marseille-based CMA CGM, the world’s third largest container shipping company, said in a statement it satisfied on June 9 the acceptance condition in its all-cash voluntary conditional general offer for NOL, after the latter’s majority shareholders, Temasek and its affiliates, tendered all of their shares in acceptance of the offer.
“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. The combination of NOL and CMA CGM will create a leading shipping company that delivers reliable and efficient service to its customers,” said Tan Chong Lee, Temasek’s joint head of portfolio management group.
“Their complementary strengths will yield mutually beneficial results. We also note and welcome the commitment of CMA CGM to enhance Singapore’s position as a key maritime hub and grow Singapore’s container throughput volumes,” Tan said.
CMA CGM said it currently owns about 78.07% of all NOL shares, and does not intend to preserve the listing status of NOL.
The Singapore-based NOL, once one of the top box liners in the world, has been struck with losses in recent years as the shipping industry struggled with weak demand and excess capacity.
NOL chief executive Ng Yat Chung told local media that the company’s best option was to sell, acknowledging they did not move fast enough to cut costs when freight rates started to free-fall, nor did they have the economies of scale to compete in an industry where fleet size and market share were crucial.
Following the agreement, the composition of NOL’s board of directors has changed, with the 10 reconstituted members appointed with effect from June 9. The board members are Rodolphe Saadé as chairman, Nicolas Sartini, Lars Kastrup, Serge Corbel, Ziad Tabet, Mathilde Lemoine, Ng Yat Chung, Kwa Chong Seng, Quek See Tiat, and Tan Puay Chiang.
CMA CGM is offering NOL shareholders SGD1.30 per share in cash. Deadline for acceptance of the offer is July 18, 2016.
