French container line CMA CGM is expanding its presence in logistics by acquiring a 25% stake in Netherlands-based operator CEVA Logistics.
CMA CGM, the world’s third-largest carrier by capacity, has committed to subscribe for mandatory convertible securities of CEVA for an estimated cost of SFr380m-SFr450m ($390m-$410m). These will be convertible to CEVA shares, subject to regulatory approval.
The investment coincides with CEVA’s initial public offering on the Swiss exchange, which was also announced today. On completion of the deal, CMA CGM will take two seats on CEVA’s board of directors.
CMA CGM said CEVA was the world’s fifth-largest player in contract logistics and was ranked 10th in the world in freight forwarding, with a strong presence in Asia.
“With this proposed investment in CEVA, CMA CGM makes a significant move, in line with its development strategy,” said CMA CGM chief executive Rodolphe Saadé.
“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.”
CMA CGM already has its own logistics operation through CMA CGM Log, which handles around 450,000 teu annually.
The move comes as a number of container carriers are making similar steps to get closer to their customers by moving further down the supply chain. Maersk has been the most notable to date, having restructured the company to focus solely on container transport and logistics.
CEVA said that in addition to CMA CGM’s investment in CEVA, both companies planned to work together to expand their commercial co-operation and to develop complementary services that address the increasing customer need for integrated end-to-end solutions and one-stop shop providers.
The company said in a release: “CMA CGM and CEVA believe that there are a number of areas where such co-operation could create significant value to customers and would be mutually beneficial to both.”
CEVA was formed in 2007 from the merger of TNT Logistics and Eagle Global Logistics. Its majority shareholders are financial institutions Capital Research and Management, Franklin Advisers and Apollo Global Management. It had revenues of $7bn in 2017.