CMA CGM To Acquire Brazil’s Largest Container Terminal For $2 Billion

CMA CGM, the French shipping company, has announced plans to acquire Santos Brasil, a Brazilian port terminal operator, for up to $2 billion.

CMA CGM will get control over South America’s largest container terminal, Tecon Santos, located at the Santos port in São Paulo state.

CMA CGM will acquire a 47.6% stake in Santos Brasil from Brazilian asset manager Opportunity for 6.3 billion reais ($1.13 billion).

Once the initial transaction is completed, CMA CGM plans to launch an acquisition bid for the remaining shares. After receiving regulatory approval, the initial phase of the deal is expected to be completed by the first quarter of 2025.

Santos Brasil shares went up almost 15% after the announcement, exceeding the leading stock index, Bovespa in Brazil, which had dropped by 0.5% in early trading. The acquisition’s initial share price of 15.30 reais represents a 20% premium over the previous closing price.

CMA CGM, the world’s third-largest container shipping company, has increased its operations by its profits during the shipping boom after the COVID-19 pandemic. The company focuses on growth in South America, supported by major trade flows between China and the United States.

Industry analysts expected larger competitors, like Maersk and MSC, to be the buyers in this acquisition. However, CMA CGM’s involvement has been appreciated, and analysts at BTG Pactual expect a positive response from minority shareholders who will likely approve the tender offer.

The deal will be entirely funded by CMA CGM’s funds. In addition to its port terminal operations, Santos Brasil handles containers, vehicles, and liquid bulk at terminals across northern and southern Brazil.

CMA CGM aims to reduce vessel wait times at the Santos port, which can last up to ten days. The shipping company has been acquiring companies like crazy, expanding its logistical operations, and even acquiring French media companies.

The group has stated that it is willing to contribute to the proposal for windfall taxes on large firms in France, but it is against changing the current shipping tax system.

CMA CGM CEO Rodolphe Saade has stated that Brazil is a fast-growing country, and the company has the resources to fulfil its ambitious goals in the region.

Reference: Reuters

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