French container shipping giant CMA CGM has announced that it has received approval from the European Commission for its pending USD 2.4 billion acquisition of Neptune Orient Lines (NOL), Southeast Asia’s largest container shipping company.
CMA CGM said that the proposed transaction was notified to the European Commission on March 8, 2016 and was cleared today following a Phase 1 review, under the condition of NOL’s exit from the G6 shipping alliance, which has been already committed by NOL and CMA CGM.
“CMA CGM and NOL will continue to cooperate with the remaining authorities to close their reviews as quickly as possible. The proposed voluntary general cash offer for NOL will be launched when all the pre-conditions to the Offer as announced on 7 December 2015 have been satisfied or waived,” CMA CGM said in a statement.
The approval comes a week after CMA CGM’s announcement on formation of an alliance with COSCO Container Lines, Evergreen Line and Orient Overseas Container Line set to start operations in April 2017.
The driving factor behind the proposed new alliance is believed to be challenging of the 2M’s dominance in the East – West trades as it is expected to take over as the largest carrier Vessel Sharing Agreement (VSA) on the Transpacific with a share of just under 36%, while in Asia-North Europe it will be within five percentage points from 2M with a nominal capacity share of 31%.
With a fleet of 470 vessels, the CMA CGM Group operates 170 shipping lines on the main commercial trade routes, whereas NOL, with a fleet of 94 vessels runs through its brand American President Lines (APL) more than 80 weekly services at ports in over 50 countries worldwide.