Neptune Orient Lines (NOL) would be "interesting" as a merger target because of a cultural element as a Singapore company that would make it equally attractive to Western companies as well as Chinese ones, commented AlixPartners md Lim Lian Hoon on the sidelines of a briefing for the group's annual Container Shipping Outlook.

In addition, after selling off APL Logistics, NOL's balance sheet is in much better shape and would be more palatable to any potential merger partner. The key to whether any deal takes place would be if majority shareholder Temasek Holdings decides it is no longer a strategic investment.

"Rationally, as a portfolio investment it's not a great investment," said Lim.Apart from the strategic objective, the other issue is pricing.

While the company would want the highest valuations, potential buyers would look at what it could bring to the table. "What is the incentive to buy into NOL?" asked Lim.Commenting the speculation that Hong Kong's Orient Overseas Container Line (OOCL) may be interested,

Lim noted that there seems to be hardly any advantage in terms of fleet size and quality or markets.In addition, regarding the issue of scale he pointed out that there may even be a negative synergy where shippers may leave both as they do not want to be tied to a group that has become too big and dominant.