NOL sale to German group in the works, says FT report - Singapore
By Nicholas Fang
A NEW force in global shipping is set to emerge if a reported deal involving Singapore’s Neptune Orient Lines (NOL) proves correct.
The deal would see NOL sold to German shipping and travel giant TUI, the Financial Times (FT) reported on Tuesday.
The paper quoted unnamed sources close to the companies as saying that Temasek Holdings, which owns 68 per cent of NOL, could sell that stake to TUI-owned shipping giant Hapag-Lloyd.
In exchange, the Singapore state investment company could take a share in TUI which, at current valuations, could amount to as much as 23 per cent of the enlarged group, the report said.
TUI is the world’s fifth-largest container shipping group. It also controls TUI Travel, Europe’s biggest tourism company.
NOL currently ranks as the world’s eighth-largest container shipping group.
A merger of Hapag-Lloyd and NOL would combine the United States and African routes of the German group with the Asian routes of its Singaporean counterpart.
A Temasek spokesman said Temasek would not comment on market speculation.
In recent months, Temasek has been active in overseas deals. Last month, it upped its stake in British bank Standard Chartered to 19 per cent.
At the end of last year, it was lead investor in a deal to recapitalise troubled Wall Street bank Merrill Lynch, injecting US$4.4 billion (S$6.2 billion) for a 9 per cent stake.
Rumours of a deal to sell NOL to TUI had emerged earlier this year, but TUI had previously denied being in talks with Temasek and NOL.
An NOL spokesman yesterday reiterated the group’s earlier stance of ‘not commenting on market speculation’.
A TUI spokesman, quoted in the FT report, said that no negotiations are taking place.
The report suggested that, for TUI, pooling shipping assets with Temasek would confirm a change of strategy that had once envisaged a divestment of Hapag-Lloyd.
The move might also take pressure off TUI chief executive Michael Frenzel, who has been criticised by investors about poor returns from his strategy to balance tourism and shipping business cycles.
The report quoted sources as saying that reaching a global scale in shipping as a complement to tourism would allow TUI’s shareholders to decide whether to split the operations or stick with the current strategy.
Mr Frenzel is said to favour putting NOL’s president and chief executive, Mr Thomas Held, a German, in charge of the merged container-shipping service, the report added.
People familiar with contacts between TUI and Temasek with regard to a Hapag-Lloyd-NOL merger were quoted as saying that talks were at an ‘early stage’ and had been going on for several weeks, with the possibility of ‘important hurdles’ being overcome as early as next month
Source : Straits Times - 07 Feb 2008
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