Tuesday, December 8, 2015

Its official CMA CGM + NOL APL

CMA CGM's $2.43bn offer for NOL was tendered on Monday December 7 and promptly accepted by NOL's largest shareholder Temasek.

The offer, at 6% above the latest closing price comes after four years of losses and will see Temasek "selling" its $2.9bn debt to CMA CGM, which already has a debt of $5bn. Not surprisingly CMA CGM will begin a major asset sale, since it is borrowing the money to make the purchase.

Temasek, which controls 67% of NOL, paid twice per share, compared to what they are now getting, when they upped their ownership from 29% in 2004.

We may start to see APL boxes on the Columbus loop.

NOL's container line, APL is 13th largest in the world by capacity, and the combined lines (before asset sales) represents a ship capacity of 2.33 mn TEU and 11.5% of the world's capacity with 563 vessels.

It is an ill wind that blows no good, but will APL be gutted?
The combined entity would also represent 12% of transpacific trade capacity as against Maersk's 9%. Such a huge swath will certainly affect the smaller players and may also shuffle some of the current alliances. It will be interesting to see how CMA CGM handles swallowing such a huge pill.


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