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CMA CGM offers to buy Cheng Lie for NT$5.25bn

CMA CGM SA, the world's third-largest container shipping line, offered to buy Cheng Lie Navigation Co (正利航業) for as much as NT$5.25 billion (US$159 million), as it seeks to tap into Asia's fast-growing demand for sea freight.

CMA CGM offered NT$21.89 for each of Taipei-based Cheng Lie's 240 million shares, the Marseille-based company said in a statement in the Commercial Times yesterday. That's less than Tuesday's closing price of NT$22.45. Taipei's stock market was closed for a holiday yesterday.

A.P. Moeller-Maersk A/S and other lines have expanded their services in Asia, as China's surging exports of clothes, toys and other goods drives up container traffic. China's exports rose 27 percent last year. World trade, about 90 percent of which moves by sea, is likely to grow 7.6 percent this year, according to the IMF.

"In the long-term, Asia is an attractive market to be in," said Ryu Je-hyun, an analyst at Mirae Asset Securities in Seoul.

"Buying Cheng Lie will enable CMA CGM to establish a firm footing in the region," Ryu said.

Cheng Lie operates 15 container ships to Asian countries, including Japan, China, Singapore and Indonesia, according to Containerisation International, which tracks the industry. The company has a market capitalization of NT$5.35 billion based on Tuesday's closing price.

The shipping line, founded in 1971, is evaluating expansion to India, the Middle East and the US, according to its Web site. In the first nine months of last year, it posted a net profit of NT$534 million, 45 percent less than a year earlier, it added.

CMA CGM will consider its bid to be successful if it gets acceptances from 59 percent of Cheng Lie's shareholders, it said in the statement.
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