CMA CGM Seek Finance for $2bn NOL Takeover

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The world’s third-largest shipping line is currently in talks with various banks to acquire a loan which will enable it to buyout Neptune Orient Lines for an alleged US$2.2 billion, according to Bloomberg.

BNP Paribas SA, HSBC Holdings Plc and JPMorgan are among the banks cited as potential lenders for CMA CGM’s big takeover.

Soo Hai Lim, a Hong Kong-based money manager at Baring Asset Management (Asia), said: “It may not be a done deal yet, but CMA needs to demonstrate they have the financing capability to go ahead. They should be able to get some synergies from this acquisition. Consolidation should be good for the industry.” 

This news follows a recent announcement that CMA CGM were in talks with Temasek Holdings’ subsidiary, Lentor Investments Pte, for its majority stake in NOL.

CMA CGM has entered into discussions to acquire NOL as a result of the overcapacity, declining freight rates and weak demand that are currently plaguing the industry.

It has been argued that the move has been made out of opportunity, rather than logic, as the shipping line seeks to compete with Maersk and MSC, the largest and second largest companies in the industry, respectively.

Spokespersons for all potential lenders, as well as Temasek Holdings, declined to comment.

Fact File: CMA CGM operates 470 vessels, which call at more than 400 ports in the world, on all five continents. In 2014, they carried 12.2 million TEU. With a presence in 160 countries through its 655 agencies network, the group employs 22,000 people worldwide, including 2,400 in its headquarter in Marseilles, France.

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