Shipper CMA offers to buy Neptune Orient Lines

French transportation firm CMA CGM SA said Monday it has made a $2.4 billion bid for Singapore-based Neptune Orient Lines (NOL) to try to cement its own position as a global leader in container shipping. The proposed cash acquisition, announced in a filing with the Singapore Exchange where NOL is listed, values it at around SG$3.4 billion ($2.4 billion).

Marseille-based CMA CGM, the world's third largest container shipping firm, is offering SG$1.30 for each NOL share, 6.1 percent more than Friday's closing price of SG $1.225. State-linked investment firm Temasek Holdings said it would sell its nearly 67 percent stake in NOL, a move that would trigger a mandatory takeover offer for the firm's remaining shares. The offer however needs to fulfil some preconditions, mainly the approval of anti-trust authorities, within a year after Monday's announcement, the filing said.

"We are supportive of this transaction as it presents NOL with an opportunity to join a leading player with an extensive global presence and solid operational record," said Tan Chong Lee, head of portfolio management at Temasek. He said the merger of the two companies "will create a leading shipping company" worldwide. CMA CGM said the acquisition of NOL would enable it to "cement its position among the global leaders in the container shipping industry" with a capacity of 2.4 million TEUs (twenty-foot equivalent unit containers), a market share of about 11.5 percent, a fleet of 563 vessels and a combined turnover of about $22 billion.

CMA CGM currently has a global market share of 8.8 percent with 469 vessels. Last year, the group handled more than 12 million TEUs and generated up to $16.74 billion in revenues.

Bloomberg News said an acquisition of NOL would strengthen the French company's position as it competes with market leaders A.P. Moeller-Maersk A/S and Mediterranean Shipping Co.