Will NOL's close acquisition talks with France’s CMA CGM set sail?

It’s granted exclusivity until December 7.

Southeast Asia’s biggest container shipper has been under the spotlight lately, stemming from talks of its potential acquisition. Now, the NOL acquisition narrative may be nearing its conclusion as it enters exclusive talks with French container transportation and shipping company CMA CGM.

According to a report form OCBC, CMA CGM has been granted exclusivity until December 7 to complete the necessary due diligence and negotiate definitive agreements relating to the offer.

OCBC adds that while there is no assurance that any definitive transaction will take place, NOL, along with Temasek Holdings which owns 66.9% of the company, is expected to sell above book value given NOL’s renewed fleet of vessels which are technologically up-to-date and operationally efficient.

“According to Alphaliner, NOL has a 2.7% market share while CMA CGM has 8.9% and the reasons we think CMA CGM may be willing to even pay a premium is not only to increase its scale, but more importantly to increase its eastbound transpacific market share from 3.9% to 6.75% (according to JOC),” OCBC said.

Meanwhile, OCBC warns investors to be cautious of a potential downside should a deal be inked, owing to the poor industry outlook.