Hong Kong

THE latest round of consolidation in the shipping industry should stack up. CMA CGM, the French group that is the world's third-biggest container carrier, has agreed to buy Singapore's ailing Neptune Orient Lines (NOL) for US$2.4 billion plus debt. The price offered to majority backer Temasek and NOL's public shareholders looks generous. Still, the unlisted buyer can chart a course to a financial payoff.

Billionaire Jacques Saade's group is paying S$1.30 a share, a 49 per cent premium to NOL's price before deal rumours leaked in July. That's a hefty mark-up versus other takeovers of Singaporean listed groups: Credit Suisse analysts say premiums have averaged 15 per cent in the last three years. A valuation of 0.95 times book value also looks full for a challenged industry.