Maersk in talks to acquire P&O Nedlloyd
In a spectacular move that could restructure the container shipping industry, A.P.-Moller-Maersk and Royal P&O Nedlloyd, parent company of P&O Nedlloyd, today said they are discussing “a possible combination” of the two companies.
The two public companies have notified the Amsterdam and Copenhagen stock exchanges of the talks, sending Royal P&O Nedlloyd’s share price rising 22 percent to 51.05 euros ($65) by noon GMT. A.P. Moller-Maersk’s A shares rose 4 percent this morning on the Copenhagen stock exchange to DKK53,100 ($9,153).
Royal P&O Nedlloyd said it could not make any further comments besides the confirmation of the discussion about the combination.
Jette Clausen, spokeswoman for A.P.-Moller-Maersk, said the Danish company was discussing an offer of Royal P&O Nedlloyd. “We are offering, not the other way around,” she told American Shipper.
If a takeover of the third-largest containership operator by Maersk Sealand, the largest, is completed, it will create a mega-containership operator with an unprecedented 17-percent share of the container shipping market and a combined fleet of nearly 500 ships.
According to information provider BRS-Alphaliner, Maersk Sealand has a fleet of 307 vessels or 1.04 million TEUs that accounts for 12 percent of the global fleet. P&O Nedlloyd’s fleet of 162 ships has a capacity of 460,000 TEUs with a world share of 5 percent.
Both companies cautioned there can be no certainty that discussions will result in an offer being made by A.P.-Moller-Maersk for Royal P&O Nedlloyd.
Shares in Royal P&O Nedlloyd have increased substantially since the company was listed as an independent public company in April 2004. The Peninsular & Oriental Steam Navigation Co. (P&O) group has a 25-percent stake in Royal P&O Nedlloyd. The Dutch company had a market capitalization of about 1.8 billion euros ($2.3 billion) before the takeover talks were confirmed, making it potentially the largest carrier acquisition in the industry.
In the past 12 years, A.P. Moller has acquired three fellow carriers: EAC-Ben in 1993, and Sea-Land Service and Safmarine in 1999. Sea-Land’s acquisition cost the Danish company $800 million.
If successful, the possible takeover also represents a sudden change for the container shipping industry, which has seen a pause in mergers and takeovers for three years. The 1999 takeover of Sea-Land by A.P. Moller and the merger of P&O Containers and Nedlloyd in 1997 were both seen as having been troublesome in terms of integration of the different operations.