French container shipping giant CMA CGM today said that it has received an approval from the Anti-monopoly Bureau of the Chinese Ministry of Commerce (MOFCOM) for its pending acquisition of Neptune Orient Lines (NOL), Southeast Asia’s largest container shipping company.
The company said that with regulatory approvals now received from MOFCOM and the European Commission on the general cash offer for the USD 2.4 billion acquisition of NOL, CMA CGM expects to announce the offer by June 2, 2016 at the latest.
The shipping major received a nod from the European Commission for the acquisition of NOL in April following a Phase 1 review. This approval was granted under the condition of NOL’s exit from the G6 shipping alliance, which has been already committed by NOL and CMA CGM. According to the company’s results for the first quarter of 2016, Indian authorities have also cleared the acquisition.
Just last month, the shipping giant became a part of a new alliance, the Ocean Alliance, which includes COSCO Container Lines, Evergreen Line and Orient Overseas Container Line.
The Ocean Alliance, scheduled to start operations in April 2017, would see the carriers merge their service networks covering the Asia-Europe, Asia-Mediterranean, Asia-Red Sea, Asia-Middle East, Trans-Pacific, Asia-North America East Coast, and Trans-Atlantic trades.
Earlier this week CMA CGM reported a net loss of USD 100 million for the first quarter of 2016, a substantial drop from USD 406 million profit posted in the corresponding quarter in 2015.
The drop was mainly attributed to the current container shipping environment which is characterized by strong pressure on freight rates, with average revenue per TEU fall of 17.6%.
The company’s revenue stood at USD 3.4 billion for the period, down from USD 4 billion when compared to the first quarter of 2015 when the group benefited from favourable freight rates and volumes.