Could there be a shakeup in the container business? CMA CGM SA, a French shipping company, has offered to buy Neptune Orient Lines Ltd. for $2.4 billion, according to the Wall Street Journal.
This is not a formal offer, as the deal requires anti-trust approvals from Europe, China and the United States, according to Reuters. A formal offer is expected to be launched in June 2016.
As part of the offer, the French shipping company will pay $1.30 per share, according to Bloomberg. This is 6.1 percent more than Friday's closing price for Neptune Orient.
This merger, if approved, could be the largest shipping consolidation since 2005, according to the Wall Street Journal.
It will increase revenue to $22 billion a year for the combined companies, according to Bloomberg. It also opens up and expands on Pacific trade routes.
"At a time when the shipping industry is facing strong headwinds, scale is more critical than ever to capitalize on synergies and capture growth opportunities wherever they arise. We recognize the strategic importance of Singapore as a key hub for the maritime industry and we are committed to reinforcing its regional leadership," said CMA CGM Vice-Chairman Rodolphe Saadé in a statement, according to the Wall Street Journal.
