Maersk Acquisition of P&O Nedlloyd Complete

By The Maritime Executive 08-10-2005 12:01:00

AP Moeller-Maersk, the behemoth container-shipping company, secured enough shares to complete its $4.7 billion purchase of Royal P&O Nedlloyd, in what is considered the shipping industry's largest takeover. P&O shareholders of the Rotterdam-based P&O Nedlloyd accepted the $70.40 per share buyout, which brought the Copenhagen-based AP Moeller's stake to 95.6 percent.

Worldwide vessel capacity has outstripped container freight, which has threatened freight rates. The purchase of P&O Nedlloyd now gives Maersk twice the capacity of the second largest container company Mediterranean Shipping Co.

CMA CGM SA, the world's fifth-largest container-shipping company, said on Aug 3 that it was in talks with CP Ships Ltd, a Gatwick, UK-based container line about a 'possible transaction'.

China Shipping Group will team up with closely held CMA CGM, based in Marseille, to bid for CP Ships, China's state news agency, Xinhua reported Aug 3, citing unidentified executives.

CMA CGM is also in talks with French financier Vincent Bollore over the sale of his Delmas shipping unit. Negotiations are set to finish by the end of August, CMA CGM said on July 27.

The bid for P&O Nedlloyd is less than AP Moeller's 2004 net income of $4.3 billion. The company plans to cut 1,500 jobs, or 5 per cent of the combined workforce, over three years to reduce costs. The Maersk Sealand unit operates about 400 container ships that haul computers, bicycles, clothes, and other products, controlling 12 per cent of the global market measured by carrying capacity.