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OOIL the 'perfect bride', but pressure to sell diminishing: DrewryOOIL the 'perfect bride', but pressure to sell diminishing: Drewry

Orient Overseas International Ltd (OOIL), parent of Orient Overseas Container Line (OOCL) would make the perfect bride for another M&A deal in boxshipping according to Drewry but a hefty premium could put off buyers.

Marcus Hand, Editor

January 16, 2017

1 Min Read
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Speculation that OOCL could be up for sale helped push up OOIL’s share price by 20% at the start of the year.

Following the slew M&A transactions last year and the collapse of Hanjin Shipping, OOCL is one of the last mid-sized container lines left with around a 3% share of the global market.

“Such a move is not a shock following the sudden rise in container M&A activity of last year and OOIL/OOCL has long been considered one of the more attractive targets available. In a recent research paper Drewry Financial Research Services identified why OOIL would make the perfect bride for any potential suitor,” Drewry said in a report.

Drewry noted that while OOCL was “no minnow” it was drifting down the rankings with the next line above it once all the consolidation has played out, Evergreen, would be nearly twice its size. “With such a long distance to play catch up, and the heavy investment required to do so, it could well be that OOIL’s management decide that now is the right time to cash in,” it said.

Drewry said that what would make OOCL attractive was its long established reputation in the market and its track record of profitability even in tough markets.

However, with improving markets OOCL could prove an expensive proposition for potential suitors. The company has a market cap of around $2.9bn and adding net debt of $1.9bn giving an enterprise value of around $4.8bn.

“OOIL would be a fine acquisition for any carrier with deep enough pockets. The pressure to sell is diminishing as the container market improves, so for the company to be tempted it will take a much higher premium over the current valuation,” Drewry concluded.

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About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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