NOL in tug-of-war binding bid for Hapag-Lloyd

Singapore - Neptune Orient Lines (NOL) has announced the submission of a binding bid to buy out the Hapag-Lloyd container shipping business. If the acquisition is successful, the two combined companies will become the third-largest company in the container shipping industry.

This announcement is the latest development between the two shipping giants since 8 August 2008, when NOL confirmed they were invited to continue into the next phase of the bidding process for the sale of the Hapag-Lloyd container shipping business.

According to media sources, NOL tendered the offer to Hapag-Lloyd's owner TUI AG on 26 September, the same day a group of Hamburg investors announced a binding offer for the German container shipping firm.

Industry experts have calculated Hapag-Lloyd's net worth at between 4 billion euros to 5 billion euros (US$5.8 billion to US$7.3 billion), but the shipping firm could be receiving lower bids due to the current economic slowdown worldwide and turmoil in markets. NOL, like the Hamburg group, did not provide details of its bid citing "strict confidentiality undertakings", said media sources.

Currently, NOL's container shipping arm APL is the world's seventh-largest, while Hapag-Lloyd ranks fifth. The two combined would rank them behind the privately held Mediterranean Shipping, based in Geneva, and industry leader A.P. Moller-Maersk of Denmark.

The Hamburg group, which includes the head of Swiss logistics firm Kuehne & Nagel Klaus-Michael Kuehne, the city of Hamburg and HSH Nordbank, wants to keep Hapag-Lloyd independent and Hamburg-based, said media sources.

NOL is 66% owned by the Singapore sovereign wealth fund Temasek Holdings.