Neptune Orient Lines Ltd on Saturday said it is in separate talks with France’s CMA CGM SA and Denmark’s AP Moeller-Maersk A/S on a potential sale of the Singapore container shipping company.
“NOL has a duty to assess all options to maximize shareholder value and improve its competitiveness,” the company said in a statement to Singapore’s stock exchange, adding that the discussions are preliminary and there’s no assurance that a definitive agreement will be reached.
CMA CGM has made a preliminary offer for Neptune Orient, which has a market value of S$2.7 billion (US$1.9 billion), people with the knowledge said earlier, asking not to be identified as the information is private.
Marseille-based CMA CGM is now conducting due diligence, though it has not been granted exclusivity, according to one of the people. Maersk is also in talks about an acquisition of Neptune Orient, though the discussions are less advanced, the people said.
A deal is unlikely to be struck soon, as the slumping shipping sector damps the appetite for aggressive bidding, two of the people said.
Temasek Holdings Pte, the Singapore state investment company that owns 67 percent of Neptune Orient, might not be willing sell its stake at a low price, they said.
The shipping company that helped cement Singapore’s status as a global trade hub is attracting takeover interest after simplifying its structure earlier this year by selling its US$1.2 billion logistics unit.
Neptune Orient, created in 1968 and now Southeast Asia’s largest container line, ran up US$1.2 billion of losses in the last four financial years as sluggish global commerce and overcapacity ate into shipping rates.
The company earlier this year sold its logistics unit, APL Logistics Ltd, to Japan’s Kintetsu World Express Inc for ￥144.2 billion (US$1.2 billion) to focus on boosting its container-line business.
Acquiring Neptune Orient would help consolidate CMA CGM’s No. 3 position in container shipping as it competes with market leaders Maersk and Mediterranean Shipping Co.
Neptune Orient’s APL container unit has a 2.7 percent market share, while CMA CGM controls 8.9 percent of the market, according to data from industry consultant Alphaliner.
Representatives for CMA CGM, Neptune Orient and Temasek declined to comment.
“We’ve always said that we will look at everything that comes up for sale in the market but our base strategy is to grow organically,” Maersk chief executive officer Nils Smedegaard Andersen said in a telephone interview on Friday, declining to comment specifically on whether Maersk is looking at Neptune Orient.
“In general we welcome any consolidation — that would only be healthy for the container line industry,” he said.
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