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Maersk on course for P&O

Published:  23 July, 2008

Some 1,500 jobs are expected to be lost if AP Moeller-Maersk's planned takeover of P&O Nedlloyd goes through.

Maersk, the world's biggest container shipping group, offered $2.9 billion for the company, with an ex-dividend cash offer of e57 per share. The news comes just one day after P&O announced a first-quarter operating profit rise of 252%, from $21 million to $74 million, and revenue up by 16%, from $1,480 million to $1,722 million.

News of the bid sparked talk of increased mergers in the industry in an attempt to create more competition against Maersk, which would have more than twice the cargo capacity of its nearest rival should the deal be successful. Another likely consequence of the proposed merger would see P&O Nedlloyd leave the Grand Alliance, a scheme whereby members use space on each other's ships.

P&O Nedlloyd chairman Andrew Land said: In this fragmented industry, we believe these two highly complementary businesses will achieve far more together than apart. Their combined scale and know-how will create the world's leading container shipping line and logistics provider.' Maersk CEO Knud Stubkjaer added that the merger would create an enhanced, more diverse and successful business'.

The offer memorandum for the deal, which has the backing of P&O Nedlloyd's largest shareholder, is expected in June.