Wednesday, June 29, 2016

More Container Freight Shipping Line Mergers and Acquisitions

Consolidation is the Name of the Current Game
Shipping News Feature
GERMANY – MIDDLE EAST – FRANCE – SINGAPORE – WORLDWIDE – As consolidation and collaboration in the container shipping industry seems to be the way forward with overcapacity and falling rates continuing to plague the global sector, four giants of ocean box freight continue with merger plans. First up, Hapag-Lloyd and United Arab Shipping Company (UASC) have reached an agreement on the terms and conditions of the possible merger between the two large shipping lines.

The Supervisory Board of Hapag-Lloyd approved the transaction subject to the anchor shareholders of Hapag-Lloyd and UASC agreeing to assume the commitments levied upon them in the Business Combination Agreement (BCA). Initially, Hapag-Lloyd were in talks to own 72% of the combined business. The conclusion of binding agreements is still subject to the consent of the shareholders of UASC.

If the merger were to go ahead, the combined business of Hapag-Lloyd and UASC will create the world’s fifth largest container shipping company in terms of capacity, overtaking Taiwan’s Evergreen Line with around 7.1% of the global market share. It also leads the way for UASC to join the THE Alliance with Hapag-Lloyd, Nippon Yusen Kaisha, Hanjin, K-Line, MOL, and Yang Ming, reaching over 20% of the global market share when it begins operations in April 2017.

In other container shipping merger news, CMA CGM has crossed the compulsory acquisition ownership threshold in Neptune Orient Lines Limited (NOL). Following its all-cash voluntary conditional general offer for NOL which was launched on June 6, CMA CGM now owns 2,376,715,557 shares representing approximately 91.28% of NOL’s share capital. Passing 91.05% ownership means the French group can (and indeed intends to) exercise its right of compulsory acquisition to acquire all the NOL shares held by shareholders who have not accepted the Offer, in accordance with the Companies Act (Chapter 50 of Singapore).

The French shipping line intends to exercise its rights of compulsory acquisition to acquire all the NOL shares from shareholders who have not accepted the Offer at a price of S$1.30 per share in cash and says it will not increase the Offer price, with acceptances to be received no later than 5:30 p.m. (Singapore time) on July 18th, 2016 or such later date(s) as may be announced from time to time by or on behalf of CMA CGM.