China Merchants buys Brazilian terminal operator

9/7/2017

China Merchants Port Holdings has acquired a 90% stake in Brazil’s TCP Participações as it expands its terminal operating business in to South America for the first time

CMPH will pay R$2.9bn ($925m) for the 50% stake in TCP owned by private equity outfit Advent International and a 40% stake owned by TCP’s founding shareholders Galigrain, Grup Maritim TCB, Pattac, Soifer and TUC. Between them, Soifer and TUC will retain a 10% stake in the company.

TCP manages the Terminal de Contêineres de Paranaguá, one of the largest container terminals in South America, and the logistics company TCP Log.

The transaction, which values 100% of TCP’s shares at approximately $1bn, is one of the largest ever announced in the container terminal sector in Latin America. The deal is subject to regulatory and antitrust approval and is expected to be completed by the end of 2017.

TCP has an annual capacity of 1.5m teu and ongoing expansion that will increase its capacity to 2.4m teu by 2019. The terminal is one of the main hubs for the import and export of cargo in Brazil, moving approximately 10% of all the containers handled in the country.

Goods handled by TCP include frozen meat, a segment in which the company is the market leader, with the largest number of refrigerated containers in the country; wood; components for the auto industry; chemicals and electronic equipment.

In addition to the container terminal, TCP is involved in door-to-port logistics through its TCP Log subsidiary.

“China Merchants Port has rapidly expanded its overseas presence and understands that the entry into Latin America, especially Brazil, is crucial for the global expansion of its terminal network,” said CMPH managing director Bai Jingtao. “TCP is not only China Merchants’ cornerstone to enter Brazil, but also the future hub of the rising commodity and goods trade flow between Brazil and China.”