CMA CGM, the world’s third largest container shipping company by TEU capacity, will acquire 25% stake in supply chain management company CEVA Logistics as the French shipping giant looks to grow its presence in the logistics sector.
CMA CGM announced Friday that it has committed to subscribe for mandatory convertible securities of CEVA in an estimated amount between 380 and 450 million Swiss francs, or approximately USD $389-$461 million.
Headquartered in Hoofddorp, Netherlands, CEVA Logistics specializes in both freight management and contract logistics. The company employs approximately 56,000 employees and temporary/agency workers in 160 countries. In 2017, the company posted revenues of over US$7 billion.
“CEVA is the #5 player in contract logistics, providing end-to-end supply chain solutions, and managing more than 9 million sqm. of warehouses in more than 750 sites in the world. It is also ranked 10th in the world in freight forwarding, with a strong footprint in Asia. Its long-standing blue-chip customer base includes leading players in the automobile, consumer & retail (including e-commerce), industrial & aerospace, technology and healthcare sectors,” CMA CGM said in press release.
CMA CGM says that with transaction, it aims to grow its presence in the logistics sector, a business closely related to shipping.
The closing of the transaction remains subject to the completion of CEVA’s planned IPO on the SIX Swiss Exchange as well as to the approval from regulatory authorities.
Commenting on the proposed transaction, Rodolphe Saadé, Chairman and CEO of CMA CGM stated: “With this proposed investment in CEVA, CMA CGM makes a significant move, in line with its development strategy. CEVA is a major player in the logistics business, which is closely related to the shipping industry. Together, the two companies will also explore possible cooperations allowing us to propose an ever more differentiated and qualitative offering while integrating services beyond maritime transport.“
Following the equity investment, CMA CGM will nominate two members of CEVA’s Board of Directors. The two companies have also agreed to explore potential opportunities to work together towards the development of joint commercial offerings, according to terms that will be defined in the coming months, as announced by CMA CGM.