Temasek: new force enters global logistics

The likely acquisition by Temasek, the Singaporean state investment agency, of Neptune Orient Lines (NOL) marks a further step in the organisation’s global expansion. NOL owns the more widely known APL Logistics which in turn owns GATX in North America and Mare Logistik in Europe. The move is likely to have major implications for competitors not just in the shipping industry, but also throughout the wider logistics market.

Last week Temasek’s offer for NOL went unconditional when it gained a 51% controlling stake in the company. Many analysts believe that a full takeover bid will follow and there is also speculation that this will lead to the integration of a number of Temasek’s transport and logistics subsidiaries. These include Port of Singapore Authority (PSA) and SembLog. Although both these organisations have their roots in Asia Pacific, PSA owns a number of port facilities in Europe and SembLog has a 20% stake in Kuehne & Nagel. In turn Kuehne & Nagel is a 100% owner of USCO in the US. SembLog is also well placed to take advantage of the growth in the Chinese market through its joint venture with China Merchants Group, ST Anda. Other related Temasek investments include a holding in Singapore Post (which has a joint venture with TNT and Royal Mail) and Singapore Airlines (part owner of Virgin Airlines).

There is also the possibility that the influence of Temasek will be extended. One of Royal P&O Nedlloyd’s (the Anglo-Dutch shipping line) largest shareholders has talked positively about the synergies which could be achieved by a merger with NOL. As well as creating scale in the global shipping industry, it would also combine both companies’ logistics operations and create a major player with exceptional global resources.