CMA CGM, the world’s third-largest shipping line, has secured financial commitments from banks to fund the proposed acquisition of Neptune Orient Lines (NOL), which has an anticipated market valuation of US$2.2 billion, according to the Journal of Commerce.
Despite there being no certainty that the negotiations will lead to a final offer, the acquisition has been planned as a way to deal with the overcapacity and low freight rates in the global container trade.
It has been previously argued that the move was made to allow CMA CGM to better compete with its shipping rivals Maersk and MSC, the world’s largest and second largest shipping lines, respectively.
The global outlook of the shipping industry is such that a number of shipping companies are opting into shipping alliances, including recent plans ordered by the Chinese government to merge Cosco and China Shipping Container Lines.
CMA CGM has until December 7, 2015 to come to a definitive agreement.