French liner giant CMA CGM is reported to be in talks with lenders with regard to its potential purchase of Singapore-based Neptune Orient Lines Limited (NOL).

The lenders in question include NP Paribas SA, HSBC Holdings Plc and JPMorgan Chase & Co., Bloomberg reports citing sources close to the matter.

CMA CGM initiated exclusive discussions with NOL, the parent company of APL container shipping firm, and its controlling shareholder Lentor Investments Pte. Ltd., with respect to a potential combination, as announced by the NOL a week ago.

The exclusivity period is expected to run until December 7th, 2015.

CMA CGM believes that, should these discussions lead to an agreement, such a combination would contribute to the consolidation of the container shipping industry, at a time when scale is more critical than ever.

NOL was also suited by Maersk Line, however; of the two, CMA CGM is believed to be a better fit. Namely, the French liner would benefit from access to APL’s large base of high-end textile and other time-sensitive product customers, as well as its profitable US government contracts linked to the use of US-flag vessels, both of which Maersk already has.

The proposed acquisition by CMA CGM would be the largest consolidation move in the history of the container shipping industry, based on the size of the fleet operated by the acquired company.

The combination of APL’s vessels (0.54 Mteu) with ships of the CMA CGM Group (1.79 Mteu) would create a combined fleet of 2.33 Mteu with an 11.5% global capacity share, based on Alphaliner figures.

(From: World Maritime News)