Singapore-based Neptune will pay $33.50 for each of APL's 24.6 million shares outstanding. That's 56 percent more than APL's closing price of $21.50 on Friday.

In trading today on the New York Stock Exchange, APL shares rose $8.371/2, or 39 percent, to close at $29.871/2.

The combined company will operate a total fleet of 113 vessels, including 76 container ships. Oakland-based APL, formerly American President Lines, is a leader in the trans-Pacific and intra-Asia shipping trades, while Neptune is strong in Europe-Far East trade and Far East-U.S. trade on the Atlantic, Neptune said.

"This combination of the complementary APL and NOL route systems, service organizations and intermodal assets creates a global container line with resources to provide customers comprehensive and efficient worldwide shipping services," APL President and Chief Executive Officer Timothy Rhein said.

The companies are expected to achieve at least $130 million in annual costs savings as a result of the agreement, Neptune Deputy Chairman and Chief Executive Lua Cheng Eng said. Neptune said it will use existing lines of credit to pay for the transaction.

After the acquisition is completed, APL will be a subsidiary of Neptune. APL will keep its current management and its offices in Oakland.

Neptune Orient posted 1996 revenue of (U.S.) $1.36 billion.

APL had 1996 net income of $69.5 million, or $2.67 a share, on revenue of $2.74 billion.

The agreement, which has been approved by the boards of both companies, is subject to regulatory and shareholder approvals.

The companies said they expect it to be completed later this year. Neptune is being advised by Goldman Sachs & Co., and APL is being advised by J.P. Morgan & Co.