French shipping company CMA CGM says it has reached a binding agreement with Danish rival Maersk to acquire Mercosul Line, one of the leading carriers in Brazil’s domestic container shipping market.
Launched in 1996 and acquired by Maersk in 2006, Mercosul Line specializes in the Brazilian domestic transport market with a fleet of four ships and 92 land based staff and 160 seafarers.
CMA CGM says the acquisition of Mercosul Line will allow it to strengthen its service offering within South America, most notably in Brazil, a market the company says “has a strong potential for development, especially on cabotage and ‘door-to-door” services’.
The Mercosul transaction is subject to Brazilian regulatory approval and the closing of Maersk’s acquisition of Hamburg Süd. The price of the sale has not been disclosed.
At the earliest, the integration of Mercosul within CMA CGM will start at the same time as the Hamburg Süd integration, which is expected in Q4 2017. Until then, Mercosul Line will continue business as usual.
“This activity is part of CMA CGM’s core strategy, which is to develop intra-regional sea transportation links and complementary services such as logistics,” CMA CGM said in a press release. “The transaction will ensure that the cabotage sector in Brazil remains competitive and that customers continue to benefit from a comprehensive choice of carriers,” the press release continued.
Rodolphe Saadé, Chief Executive Officer of CMA CGM called the acquisition of Mercosul a milestone in CMA CGM’s development strategy in South America. “It is a well-managed company and we will leverage this platform to expand our footprint and service offerings to and from Latin America, seizing opportunities linked to the high growth prospects in this region. As a result, CMA CGM will be able to propose complete door-to-door services continue providing best-in-class services to its customers,” Saadé said.
“Mercosul is a highly respected and well-run company with an excellent fleet and customer value proposition. Its dedicated talents are well regarded both internally and externally. CMA CGM is a good fit for Mercosul and we are confident that they will continue to develop the company going forward,” says Søren Toft, Chief Operating Office, Maersk Line.
The acquisition of Mercosul will follow CMA CGM’s acquisition of Singaporean shipping company Neptune Orient Lines (NOL) in 2016.