Danish shipping giant Moeller-Maersk will offer €2.3 billion in cash to buy Dutch rival P&O Nedlloyd to solidify its position as the world's top container line.
P&O Nedlloyd will back the intended offer of €57 per share, which represents a 40.6% premium over its May 9 price before the tie-up talks were announced yesterday, the companies said in a joint statement today.
Maersk, which owns the world's largest container shipping line, Maersk Sealand, said the industry - which has seen rising freight rates for several years - needed to consolidate and that it needed more ships to continue to grow.
Britain's P&O - with a 25% stake in the Dutch group - said it planned to accept the offer if it is made.
Maersk commands a market share of over 12% of global container traffic with almost 400 ships, but its share fell slightly last year as it did not have enough vessels. P&O Nedlloyd has 156 ships.
The two companies said they would iron out the takeover details over the next few weeks and expected Maersk to launch the offer next month. P&O Nedlloyd said the takeover would lead to 1,500 job cuts.
The Dutch company also reported first-quarter operating profit of $74m, up from $21m in the year-earlier period, and forecast that the full-year figure would reach at least $550m. Revenue rose 16% to $1.7 billion.
The Maersk group, which also pumps oil in the North Sea and runs supermarket chains and an airline, posted net profit of 18.4 billion Danish crowns ($3.18 billion) in 2004 on total sales of 166 billion. The Danish conglomerate has a market capitalisation of around $40 billion.
