EMEA News
CMA CGM Proposes Alliance Shakeup to Win EU Approval for Takeover of Singapore's NOL
CMA CGM S.A. (CMA CGM) will withdraw Neptune Orient Lines (NOL) from competing shipping alliances in hopes of facilitating its proposed $2.4 billion takeover of the Singaporean rival, media reports.
The French container shipping group's strategy to win European Union (EU) antitrust approval was disclosed by people familiar with the matter, and it echoes the route taken two years ago by Compania Sud Americana de Vapores (CSAV), when it agreed to withdraw from two shipping alliances covering activity between Northern Europe and the Caribbean, as well as South America's west coast.
CSAV's bid, which was prompted by a tie-up between it and German container shipping company Hapag Lloyd, gained EU approval.
CMA CGM last year was in talks with lenders, including BNP Paribas SA, HSBC Holdings Plc, and JPMorgan Chase & Co., to fund the NOL takeover - said to be a part of Singapore's requirement for the company to demonstrate it has sufficient financial resources to acquire NOL, which has a market value of S$3.1 billion ($2.2 billion).
CMA's offer to withdraw NOL from competing shipping alliances has caused the EU competition authority to take extra time to examine the matter: the deadline for its decision on the NOL takeover has been pushed from April 15 to April 29.
Late last year, Drewry Shipping Consultants Limited said that an acquisition by A.P. Moeller-Maersk A/S or CMA CGM would likely not be a financially advantageous move for either company but noted that of the two, "CMA CGM is the better fit."
