The European Commission has approved CMA CGM's $3.38 billion acquisition of Singapore's Neptune Orient Lines (NOL), the French container shipping giant said yesterday.
The commission was notified of the proposed transaction on March 8, and it was cleared yesterday after a review, on condition that NOL exit the G6 shipping alliance.
CMA CGM said in a statement: "Both companies will continue to co-operate with the remaining authorities to close their reviews as quickly as possible."
It added that the proposed voluntary general cash offer for NOL will be launched when preconditions announced on Dec 7 last year have been satisfied or waived.
NOL is being bought for $1.30 a share, subject to anti-trust clearances from the European Union, China and the United States.
CMA CGM vice-chairman Rodolphe Saade previously said the transaction is a significant milestone in CMA CGM's development, and "will further reinforce its position as a leader in global shipping".
NOL chief executive Ng Yat Chung said in February that the firm has made all necessary anti-trust filings.
NOL posted a net profit of US$707.2 million (S$951 million) for the 12 months to Dec 25, well up on the US$259.8 million net loss before, owing to a one-time gain of US$888 million from the sale of its logistics unit.
Revenue in the 12 months fell 23 per cent to US$5.38 billion.
NOL was once ranked among the five largest global carriers.
In fact, Temasek Holdings had forked out $2.80 per share in 2004, to raise its 30 per cent stake in the firm to 68.6 per cent, following a trans-Pacific trade boom.
The global financial crisis in 2007 was the start of its major woes, as it slowly lost market share and profitability. Despite being in the doldrums, it is still South-east Asia's largest container shipping firm.
The acquisition is slated to be completed by June.
Privately owned CMA CGM has said its aim is to delist NOL, and CMA CGM would need more than 90 per cent to get NOL delisted.
This would follow in the footsteps of other Singapore names being delisted or privatised, such as Osim International and Singapore-based Tiger Airways.
Mr Saade said the move will help NOL address new challenges the industry faces, and emphasised the importance of Singapore as a major hub for the maritime industry.
Challenges include growing pressure from excess capacity, the lacklustre global economy and ultra-low bunker prices, which have pushed freight rates much lower than they have ever been.
This article was first published on April 30, 2016.
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