France’s CMA CGM has accomplished a $5 billion takeover of Bollore Logistics, its biggest-ever acquisition, and mentioned it had funds for extra offers because it seeks to counter volatility in container delivery.
The acquisition of the logistics division of French conglomerate Bollore, introduced final yr, closed on Thursday at a remaining value of 4.85 billion euros ($5.25 billion) after debt and money changes.
The deal will prolong the attain of CMA CGM’s CEVA Logistics unit into areas resembling freight administration for pharmaceutical, cosmetics and luxurious corporations.
CMA CGM, based mostly in Marseille and privately managed by the founding Saade household, 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 instructed 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 mentioned.
Bollore Logistics’ freight administration actions, which serve corporations resembling LVMH and L’Oreal, had restricted overlap with CMA CGM’s CEVA division, Saade mentioned.
The solely concessions required by regulators cowl sure French abroad territories, the place CMA CGM will divest Bollore Logistics’ actions.
CMA CGM says the deal will make it one of many 5 greatest logistics corporations and it projected logistics would account for some 45% of group gross sales in 2024.
Logistics accounted for simply 15% of group core income final yr however virtually matched its delivery operations in revenue margin within the final quarter as delivery earnings slid.
A post-COVID delivery increase fanned income for delivery corporations, prompting CMA CGM to put money into port terminals, logistics corporations and French media actions.
Saade mentioned CMA CGM would focus this yr on integrating Bollore Logistics, which generated gross sales of seven.1 billion euros in 2022 and has some 15,000 employees, however remained in a beneficial debt and money place to grab additional takeover alternatives.
CMA CGM this week submitted an improved provide price 605 million kilos ($765.51 million) for British-based Wincanton, whose actions embody grocery distribution providers, although U.S.-based GXO Logistics on Thursday introduced the next bid.
($1 = 0.9232 euros)
($1 = 0.7903 kilos)
(Reuters – Reporting by Gus Trompiz; modifying by Jason Neely)
