P&O HAS paved the way for the €2.3 billion (£1.5 billion) takeover of Royal P&O Nedlloyd after agreeing to sell its key shareholding to AP Moller-Maersk of Denmark.
P&O, the ports and ferries operator, said yesterday that it was likely to book a £175 million profit from selling its 25 per cent stake in P&O Nedlloyd, the container shipping company, for £378 million, in line with the bid price. The deal is due to settle today.
The addition of P&O’s stake is subject to approval by regulators in the Netherlands, where P&O Nedlloyd is registered, and would give Maersk a 44 per cent holding in its takeover target.
The merger of P&O Nedlloyd with Maersk Sealand, the Maersk container group, will create the world’s biggest shipping line, more than twice the size of its nearest rival.
Competition concerns are unlikely to prove a barrier to a merger because the industry is fragmented. The European Commission has spoken recently of the need to create European champions that are capable of competing.
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Maersk has about a 12 per cent share of the market and analysts expect the addition of P&O Nedlloyd to boost its share to about 17 per cent.
P&O said that it would use the proceeds of the sale to reduce debt and accelerate the reduction of the deficit in its main UK pension scheme.