French firm lines up funds for NOL bid

PARIS/SINGAPORE • French shipping giant CMA CGM has obtained firm commitments from banks to finance the takeover of Singapore's Neptune Orient Lines (NOL), which has a market value of US$2.2 billion (S$3.1 billion), two people familiar with the deal said.

CMA CGM, which is in exclusive talks to initially buy nearly 67 per cent of NOL from investor Temasek Holdings, has tapped lenders including HSBC, BNP Paribas and JPMorgan to help finance the transaction through a syndication process, the sources said.

Family owned CMA CGM is ranked as the world's third-largest container shipping firm and a takeover of NOL would boost its position on transpacific routes at a time when operators are struggling with overcapacity and low freight rates.

As the talks approach a deadline next Monday, NOL shares are hovering close to their highest level since February 2013 and its share price has risen more than 40 per cent this year, outperforming a double-digit decline in the Singapore benchmark index.

One of the sources said potential synergies were significant and would justify relatively high multiples in the acquisition cost. The other source said the financing would be marketed in Europe and the United States.

CMA CGM, NOL, Temasek and the banks declined to comment.


A version of this article appeared in the print edition of The Straits Times on December 04, 2015, with the headline 'French firm lines up funds for NOL bid'. Print Edition | Subscribe