PARIS, Nov 3 (Reuters) – CMA CGM shipping group has agreed to acquire approximately $ 2 billion worth of Fenix Marine Services (FMS) container terminal in the Port of Los Angeles, which has its presence at a major hub for transpacific trade.
CMA CGM currently holds 10% of the shares in FMS and will buy the remaining 90% of the EQT Infrastructure III (EQTAB.ST) investment fund based on an enterprise value of US $ 2.3 billion, CMA CGM and EQT announced on Wednesday.
France-based CMA CGM, one of the world’s largest container shipping companies, expects to pay out around $ 1.8 billion for the 90% stake and will finance the deal from its own resources, she added.
The Port of Los Angeles handles huge volumes of cargo between China and the United States and has been embroiled in increasing shipping congestion as the coronavirus pandemic disrupted global supply and demand for goods. Continue reading
FMS is the third largest container terminal in Los Angeles and the acquisition will add 49 terminals in which CMA CGM already has a stake worldwide, it said.
“The rapid recovery in the global economy has shown the importance of ports and logistics infrastructure,” said Rodolphe Saadé, chairman and CEO of CMA CGM, in a statement.
“It (FMS) is an important industrial facility that will significantly strengthen our position and support our rapid growth in this market.”
CMA CGM will act as the terminal operator for FMS and plans to invest in expanding the capacity of the site, in particular by building a new ship berth, expanding the container yard and increasing rail capacity for onward transport.
Like its competitors in the shipping company, CMA CGM has expanded its presence along the logistics chain in the areas of port infrastructure and non-maritime transport services.
Revenues have skyrocketed this year as the pandemic has resulted in high freight rates and saturated shipping capacity.
With the acquisition of FMS, which is subject to regulatory approval, CMA CGM regains ownership of the terminal that it sold to EQT in 2017.
CMA CGM then sold a 90% stake for an enterprise value of $ 875 million to bolster its finances following the acquisition of Singapore-based shipping company NOL.
The company’s $ 2.3 billion enterprise value under the new deal is 13.7 times its expected earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2022, according to CMA CGM.
Reporting by Gus Trompiz Editing by Sudip Kar-Gupta and Mark Potter
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