French container shipping giant CMA CGM has received the Chinese authorities' green light - the last regulatory hurdle in its bid to acquire Singapore's Neptune Orient Lines (NOL).
CMA CGM, the world's third-largest container shipping firm, said in a statement yesterday that China's anti-monopoly body had approved the $3.38 billion deal buyout. It expects to table its offer by June 2.
The acquisition had been subject to anti-trust regulatory approval from the authorities from the European Union and China. Both have now been obtained.
The acquisition will bring CMA CGM's fleet to 563 vessels, up from 469, and the combined firms will have a global market share of 11.5 per cent.
NOL is being bought for $1.30 a share, although it had been snapping up shares on the open market at less than this price.
Majority stakeholder Temasek Holdings, which owns 67 per cent, has already agreed to sell its shares.
Privately-owned CMA CGM said its aim is to delist NOL but it would need more than 90 per cent of the shares to do this.
NOL posted deeper losses in the first quarter this year, recording a net loss of US$105.1 million (S$143 million) compared with a net loss of US$10.8 million a year earlier.
Revenue for the three months to April 1 fell 28 per cent to US$1.14 billion, mainly due to a slide in liner revenue.
Loss per share from continuing operations was 4.05 US cents for the first quarter, compared with loss per share of 1.40 US cents a year earlier. Net asset value per share was 92 US cents as at April 1, down from 95 US cents as at Dec 25.
CMA CGM vice-chairman Rodolphe Saade has said that the company is committed to reinforcing Singapore's regional leadership role for the maritime industry.
Mr Saade told The Straits Times in December last year that he would not comment on how NOL was being managed but "I would say we firmly believe we have the expertise to allow NOL to develop a much stronger and better business".