CMA CGM caps logistics push with $5 bln Bollore deal
29/02/2024 11:59
By Gus Trompiz
PARIS, Feb 29 (Reuters) - France's CMA CGM has completed
a $5 billion takeover of Bollore Logistics, its biggest-ever
acquisition, and said it had funds for more deals as it seeks to
counter volatility in container shipping.
The acquisition of the logistics division of French
conglomerate Bollore BOLL.PA , announced last year, closed on
Thursday at a final price of 4.85 billion euros ($5.25 billion)
after debt and cash adjustments.
The deal will extend the reach of CMA CGM's CEVA Logistics
unit into areas such as freight management for pharmaceutical,
cosmetics and luxury firms.
CMA CGM, based in Marseille and privately controlled by the
founding Saade family, is the world's third-largest container
line.
"With Bollore Logistics, the logistics side will start to
have a very significant weighting in CMA CGM as a whole,"
Chairman and CEO Rodolphe Saade told Reuters.
"I've pushed to diversify into logistics because firstly it
requires less capex and secondly it's a sector less subject to
cycles than shipping," he said.
Bollore Logistics' freight management activities, which
serve firms such as LVMH LVMH.PA and L'Oreal OREP.PA , had
limited overlap with CMA CGM's CEVA division, Saade said.
The only concessions required by regulators cover certain
French overseas territories, where CMA CGM will divest Bollore
Logistics' activities.
CMA CGM says the deal will make it one of the five biggest
logistics firms and it projected logistics would account for
some 45% of group sales in 2024.
Logistics accounted for just 15% of group core profits last
year but almost matched its shipping operations in profit margin
in the last quarter as shipping earnings slid.
A post-COVID shipping boom fanned profits for shipping
firms, prompting CMA CGM to invest in port terminals, logistics
firms and French media activities.
Saade said CMA CGM would focus this year on integrating
Bollore Logistics, which generated sales of 7.1 billion euros in
2022 and has some 15,000 staff, but remained in a favourable
debt and cash position to seize further takeover opportunities.
CMA CGM this week submitted an improved offer worth 605
million pounds ($765.51 million) for British-based Wincanton
WIN.L , whose activities include grocery distribution services,
though U.S.-based GXO Logistics GXO.N on Thursday announced a
higher bid.
($1 = 0.9232 euros)
($1 = 0.7903 pounds)
(Reporting by Gus Trompiz; editing by Jason Neely)
((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters
Messaging: gus.trompiz.thomsonreuters.com@reuters.net))