EU Approves CMA CGM - NOL Merger
The European Commission said on Friday it had cleared French shipping group CMA CGM's $2.4 billion takeover of Neptune Orient Lines on condition that NOL pulls out from a rival shipping alliance.
The announcement confirms a Reuters report on April 21 about the impending approval.
CMA CGM, the world's third-biggest container shipping company, is looking to strengthen its position against bigger rivals Maersk Line and Swiss-based Mediterranean Shipping Co (MSC).
The European Commission said in a statement that its approval was conditional on CMA CGM's commitment to withdraw NOL from the G6 alliance, which competes with its own Ocean Three alliance.
"Container line shipping plays a central role in global trade, so competition in this sector is essential for businesses and consumers in the EU," EU Competition Commissioner Margrethe Vestager said.
Shipping alliances, which involve sharing vessels and routes to save costs, are seen as crucial to helping the industry deal with a severe market downturn.
The concession is similar to that offered by German container shipping company Hapag Lloyd and Chilean peer Compania Sud Americana de Vapores (CSAV) two years ago in return for the EU approving their tie-up.