The European Union’s competition regulator is expected to approve this week French container-shipping giant CMA CGM’s $2.4 billion acquisition of Singapore’s Neptune Orient Lines Ltd., a person familiar with the matter said.
Amid a raft of consolidation in the container-shipping industry, regulators have been cautious about approving deals that might give carriers concentration of market share in various alliances they have long had with competitors. The alliances, akin to code sharing in the airline business, help individual operators save costs by sharing ships and port operations.
CMA CGM, the world’s third biggest container operator, said last week it was forming Ocean Alliance, a new grouping comprising China Shipping Cosco Group, Hong Kong’s Orient Overseas Container Line and Taipei-based Evergreen Marine. Ocean Alliance will eventually make room for its newly acquired NOL, which is currently part of a different alliance called G6.
“The watchdog will give the green light for the takeover, after CMA CGM’s assurance that NOL will be pulled out of a competing shipping alliance,” this person said.
Ocean Alliance, which is itself subject to approvals by U.S., European and Chinese regulators, is set to begin operations early next year and will rival the dominance of No. 1 Maersk Line, part of Danish giant A.P. Moeller-Maersk A/S, and No. 2 Mediterranean Shipping Co. of Switzerland, in the lucrative Asia-to-Europe ocean trade.
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