Neptune Orient to Buy APL in $825-Million Deal

Neptune Orient Lines of Singapore is buying Oakland-based APL Ltd. for $825 million in a combination of major worldwide container shipping carriers, the companies said Sunday.

After the planned takeover, NOL will operate a fleet of 113 vessels, including 76 container ships, with revenue of more than $4 billion.

The deal comes as NOL’s earnings have slipped for the last three years amid aggressive competition in the container shipping business, which accounts for 75% of its revenue.

APL, which also has trucking and other transportation businesses, last year more than doubled its earnings to $69.5 million on revenue of $2.7 billion.

The firms said the deal would combine NOL’s operations in trade from the Far East to Europe and United States via the Atlantic with APL’s success in trade across the Pacific and within Asia.

APL, formerly known as American President Cos. Ltd., will retain its name and Oakland headquarters under the deal and will take over NOL’s North American service operations.

NOL will pay $33.50 a share for APL, a 56% premium to APL’s closing price of $21.50 Friday on the New York Stock Exchange.

Lua Cheng Eng, deputy chairman and chief executive of NOL, estimated the merger would save at least $130 million from consolidating operations, but the companies did not say if any operations would be closed or if workers would be laid off.

NOL has 4,800 employees worldwide and APL has 4,000.

The companies expect the deal to be completed in the fall.