CMA CGM seeks financing for Neptune Orient Lines takeover

NOL is valued at $3.1 billion.

CMA CGM SA, the world’s No. 3 container shipping company, is in talks with lenders to finance its potential takeover bid for Singapore’s Neptune Orient Lines Ltd., people with knowledge of the matter said.

The French shipping company is in discussions with banks including BNP Paribas SA, HSBC Holdings Plc and JPMorgan Chase & Co. for loans to back an offer for Neptune Orient, the people said, asking not to be identified as the information is private. Under the city-state’s takeover code, CMA CGM should demonstrate it has sufficient financial resources before making a definitive bid for Neptune Orient, which has a market value of S$3.1 billion ($2.2 billion).

Buying Neptune Orient would help Marseilles-based CMA CGM consolidate its position in the global container market as it competes with A.P. Moeller-Maersk A/S and Mediterranean Shipping Co. CMA CGM is seeking a combination with its Singaporean rival as shipping companies struggle to revive earnings amid a glut of vessels, shrinking demand and declining rates.