P&O exits Dutch venture P&O Nedlloyd |
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Wed, 29 Jun 2005 22:55
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LONDON: Britain's largest ports and shipping firm Peninsular and Oriental Steam Navigation Company (P&O is ending its association with container shipping. It is selling its entire 25 per cent holding in Dutch company Royal P&O Nedlloyd to AP Moeller-Maersk of Denmark for 378 million pounds, ending a 40-year-old involvement.
The deal will take the Danish company's stake in P&O Nedlloyd to 44 per cent. The sale is being routed through two banks, said Maersk Wednesday, Danske Bank (15 per cent) and Nordea (10 per cent). These banks will in turn sell the holdings to Maersk. A spokesperson said the company had evolved an arrangement with the banks to meet certain prevailing legal formalities.
The stake acquisition is part of Maersk's plan announced earlier this month to take over P&O Nedlloyd for 2.3 billion Euros with an aim to consolidate its position as the world's No 1 container shipping firm. It had offered 57 Euros a share. Although the deal is agreed, it is to receive regulatory approval in Europe and the Americas.
P&O, however, receives 56.25 Euros a share for its 10.16 million shares. The company said it intends to use the proceeds to reduce its debts, reduce the deficit in the pension fund and invest in the expansion of its port business. A spokesperson said, "Our sole focus in terms of investment at the moment is our ports business." The company will book a profit of 175 million pounds under International Financial Reporting Standards.
P&O was one of the founding members of Overseas Containers Limited, which became P&O Containers in 1985 and merged with Nedlloyd Lines in 1996. The Dutch company owns a fleet of 156 ships calling at 217 ports. Its revenue in 2004 stood at 5.6 billion Euros.
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