CMA CGM launches all cash offer for NOL

Rodolphe Saadé, Vice-Chairman of CMA CGM: In a particularly challenging international context in the shipping sector, our offer fully and fairly values NOL

JUNE 6, 2016 — Consolidation in the container shipping industry is moving forward.

Marseille, France, headquartered CMA CGM S.A. today launched an all-cash voluntary conditional general offer for all outstanding shares of Singapore based Neptune Orient Lines Limited (NOL) other than those it already owns, controls or has agreed to acquire.

NOL, whose core business is APL and whose majority shareholder is Singapore-government owned Temasek Holdings, posted a first quarter 2016 loss of US $105 million, citing weak global demand and excess capacity in the industry that saw APL’s first quarter year-on-year volume fall 6% due mainly to weak backhaul volume, with average freight rates falling by 23% in the same period,

CMA CGM currently owns 10.5% of all NOL shares, and intends to delist and privatize NOL through the Offer.

NOL’s majority shareholders (Temasek and its affiliates), which own 66.78% of all NOL shares, will tender all of their NOL shares in acceptance of the offer.

The offer price is SGD 1.30 (about US$ 0.96) per NOL share in cash, which CMA CGM does not intend to increase.

“Six months after the announcement, and after receiving the relevant authorizations, CMA CGM today opens its offer for NOL shares. We offer each and every NOL shareholder SGD 1.30 per share in cash. In a particularly challenging international context in the shipping sector, our offer fully and fairly values NOL. We believe this is an attractive offer for all shareholders, as it was for Temasek and its affiliates, which have committed to tender their 66.78% stake,” said Rodolphe Saadé, Vice-Chairman of CMA CGM.

CMA CGM says the offer provides NOL shareholders with an opportunity to realize their investment in NOL at a 49% premium to NOL’s unaffected share price on July 16, 2015 and a 33% premium to NOL’s three-month volume-weighted average share price prior to July 16, 2015.

CMA CGM believes that the acquisition of NOL would enable CMA CGM to reinforce its position as a leader in the container shipping industry, with a capacity of approximately 2.35 million TEUs, a market share of approximately 11.7%, a fleet of approximately 540 vessels and a combined annual turnover of approximately US$21 billion.

CMA CGM says that leveraging the complementary strengths of the two entities, the combined group’s customers will have access to an enlarged and well-balanced shipping coverage across the strategic trades of global commerce, and to an extended range of products and services. CMA CGM further believes that the combination of the two groups would also create scale to enhance competitiveness and deliver sustainable performance.

CMA CGM says that it attaches significant importance to Singapore and the region for the deployment of its strategy in Asia. It plans to use Singapore as a key hub in Asia and plans to establish its regional head office in Singapore.Acceptances of the Offer must be received not later than 5.30 p.m. (Singapore time) on July 4, 2016, or such later date(s) as may be announced from time to time by or on behalf of CMA CGM.