In 1989 the Company first approached the Government to appeal for ‘greater co-operation between ferry companies’. Beneath the sea, work had begun on the channel tunnel a year earlier and P&O wanted to be prepared for tighter times. The appeal was refused and, in spite of constant badgering, the status quo continued until after the tunnel was completed in 1994. Two years later P&O and the Swedish Stena Line announced details of a merger, which was promptly referred to the Monopolies and Mergers Commission. In 1998 the new company, P&O Stena, (P&O owning 60% and Stena the remaining 40%) finally set sail on the Dover to Calais route.
The passage of the merger between P&O Containers and the Dutch Royal Nedlloyd in 1996 was altogether smoother. The joint venture was 50:50 and P&O Nedlloyd rapidly became one of the largest container transportation businesses in the world. Cost savings of $200m were achieved in the first year and within a matter of weeks the new company had acquired the container operations of Blue Star Line, increasing volumes further still. In the same year, on a different trade, P&O acquired Royal Nedlloyd’s 50% share in North Sea Ferries which changed its brand and livery to P&O.
In 1998 the Associated Bulk Carriers name was revived when P&O Bulk Shipping and the Shougang Corporation commenced operations together. The merger created the world’s largest independent, capesize bulk carrier.