On Monday, CMA CGM announced that it had reached the ownership threshold required to delist Singapore-based Neptune Orient Lines (NOL) and take it private, a long-expected part of the takeover bid it initiated in December.
Since June 6, when CMA opened a general offer for outstanding shares of the firm, it has acquired 90.7 percent of NOL's share capital. This is sufficient to withdraw NOL from its listing on the Singapore Exchange when the offer period closes on July 18.
As soon as CMA CGM acquires 91.05 percent of the share capital, it can compel all remaining shareholders to accept its buyback offer at just under one dollar per share. The firm does not intend to raise the price as the closing date approaches.
All anti-trust regulators with jurisdiction over the merger have issued approvals.
CMA CGM says that adding NOL will give it 12 percent of the global market share with 18 million TEU per year carried and $21 billion in turnover. It will operate a combined fleet of 540 vessels with a capacity of 2.4 million TEU. In addition, as NOL is centered on the Asia-Pacific trades, CMA CGM expects the acquisition to bolster its strength in a key global market, complementing its existing presence in the Atlantic and on the Asia-Europe route.
CMA CGM has committed to making Singapore its home in Southeast Asia, establishing a regional head-office in the city-state and forming a joint venture with its port operator to use its terminals as a new regional hub. The venture, to be called CMA CGM-PSA Lion Terminal, will give CMA and NOL the use of four berths at Singapore's Pasir Panjang Terminal Phase 3 and 4. Phases 3 and 4 are Pasir Panjang’s most advanced terminals, and are designed to accommodate new ultra large container vessels and their heavy cargo flows.