CMA CGM said to tweak alliances to win EU approval for NOL deal

PARIS (BLOOMBERG) - CMA CGM offered to adapt liner-shipping alliances in a bid to clinch antitrust approval from European Union regulators to buy Singapore's Neptune Orient Lines, according to a person familiar with the matter.

The French company, the No. 3 container shipping company by capacity, told the European Commission it would remove Neptune Orient's APL container unit from the G6 Alliance to allay competition concerns over the tie-up, said the person, who asked not to be named because the EU review is ongoing.

The move would avoid anti-competitive links between rival consortia - given that CMA CGM plans to bring APL into its separate Ocean Three Alliance with United Arab Shipping and China Shipping Container Lines, the person said. Based on the concessions, the EU antitrust regulator is expected to approve the deal by an April 29 deadline, the person said.

The S$3.38 billion deal would narrow the gap with market leader A.P. Moeller-Maersk A/S by strengthening the combined company's position on shipping routes in key markets such as the U.S. and within Asia. APL has a strong presence on intra-Asia and trans-Pacific trades, while CMA CGM has a leading position on Asia-Europe routes.

CMA CGM, Neptune Orient Lines and the commission didn't immediately respond to requests for comment.

The deal is the largest for the container shipping industry since Maersk bought Royal P&O Nedlloyd NV for the equivalent of US$2.96 billion (S$3.99 billion) in 2005. Germany's Hapag-Lloyd AG merged last year with Chile's Cia. Sud Americana de Vapores, and the Chinese government is said to be preparing a plan to combine China Cosco Holdings Co. and China Shipping Container Lines or merge some of their operations.