(Bloomberg) — France’s CMA CGM SA is in talks to accumulate Singapore container transport firm Neptune Orient Lines Ltd., as majority proprietor Temasek Holdings Pte seeks a purchaser, individuals with data of the matter mentioned.

CMA CGM has made a preliminary supply for NOL, which has a market worth of S$2.7 billion ($1.9 billion), two of the individuals mentioned, asking to not be recognized as the data is non-public. Marseille-based CMA CGM is now conducting due diligence, although it hasn’t been granted exclusivity, in line with one of many individuals. Denmark’s A.P. Moeller-Maersk A/S can also be in talks about an acquisition of NOL, although the discussions are much less superior, the individuals mentioned.

A deal is unlikely to be struck quickly, because the slumping transport sector damps the urge for food for aggressive bidding, two of the individuals mentioned. Temasek, the Singapore state funding firm that owns 67 p.c of NOL, might not be prepared promote its stake at a low worth, they mentioned.

Representatives for CMA CGM, NOL and Temasek declined to remark.

“We’ve always said that we will look at everything that comes up for sale in the market but our base strategy is to grow organically,” Maersk Chief Executive Officer Nils Smedegaard Andersen mentioned in a telephone interview Friday, declining to remark particularly on whether or not Maersk is NOL. “In general we welcome any consolidation — that would only be healthy for the container line industry.”

NOL gained 6.6 p.c to shut at S$1.05 in Singapore buying and selling. Maersk shares rose 2.4 p.c in Copenhagen Friday.

The transport firm that helped cement Singapore’s standing as a world commerce hub is attracting takeover curiosity after simplifying its construction earlier this yr by promoting its $1.2 billion logistics unit. NOL, created in 1968 and now Southeast Asia’s largest container line, ran up $1.2 billion of losses within the final 4 monetary years as sluggish international commerce and overcapacity ate into transport charges.

Shipping Rivalry

Acquiring NOL would assist consolidate CMA CGM’s No. 3 place in container transport because it competes with market leaders Maersk and Mediterranean Shipping Co. NOL’s APL container unit has a 2.7 p.c market share, whereas CMA CGM controls 8.9 p.c of the market, in line with information from trade marketing consultant Alphaliner.

CMA CGM, based in 1978, has a fleet of 467 vessels transporting 12.1 million twenty-foot equal models of cargo yearly, in line with its web site.

Hapag-Lloyd AG, Germany’s largest transport line that began buying and selling on the Frankfurt inventory change on Friday, repeatedly flirted with the thought of teaming up with NOL. Billionaire stakeholder Klaus-Michael Kuehne mentioned in an interview, which ran in Swiss newspaper Finanz & Wirtschaft in June, that combining the 2 corporations can be “interesting,” although a problem as NOL is “not in good shape.”

Shares in Hapag-Lloyd, the world’s No. 5 service, hovered barely above its lowered difficulty worth of 20 euros, giving it a market capitalization of two.3 billion euros.

–With help from Klaus Wille and Kyunghee Park in Singapore, Francois de Beaupuy in Paris, Christian Wienberg in Copenhagen and Nicholas Brautlecht in Hamburg.

©2015 Bloomberg News

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