Neptune Orient, Southeast Asia’s biggest container shipper, said Saturday it’s in separate preliminary talks with CMA CGM SA and A.P. Moeller-Maersk A/S on a possible sale of the company, according to Bloomberg. CMA CGM has made a preliminary offer for Neptune Orient and is conducting due diligence, though it hasn’t been granted exclusivity, while discussions with Maersk are less advanced, people with knowledge of the matter said before Neptune Orient’s announcement.
“NOL is a good asset,” said Rahul Kapoor, a Singapore-based director at Drewry Maritime Services Pvt, a shipping research company. Still, "it’s unlikely to turn profitable next year. 2016 could be even worse for the shipping industry.”
Liners including Neptune Orient have been reducing costs, selling assets and cutting employees to stem years of losses as sluggish global commerce and overcapacity eat into shipping rates. Neptune Orient, which helped cement Singapore’s status as a global trade hub, is attracting takeover interest after simplifying its structure this year by selling its $1.2 billion logistics unit.
“NOL has a duty to assess all options to maximize shareholder value and improve its competitiveness,” Neptune Orient said in a statement. The discussions are preliminary and there’s no assurance that a definitive agreement will be reached, it said.
CMA CGM is in discussions on a “potential combination with Neptune Orient Lines,” the Marseille-based company said Monday. Maersk Chief Executive Officer Nils Smedegaard Andersen said before Neptune Orient’s announcement that “we will look at everything that comes up for sale in the market but our base strategy is to grow organically.” Maersk hasn’t commented after the Asian shipping company’s confirmation.
To read more, click HERE.