Ceva Logistics acquires CMA CGM's freight management unit as partners deepen ties
Part-owner CMA CGM says deal will accelerate Ceva's debt reorganization and digital transformation.
Dutch third-party logistics (3PL) giant Ceva Logistics AG said today it will acquire the freight management business of CMA CGM S.A., the French container shipping line that is Ceva's major shareholder and strategic partner.
The move cinches the tight relationship between the two firms that was announced in April, when Ceva launched a $1.3 billion initial public offering (IPO) with CMA CGM taking a one-quarter stake, and said it planned to build integrated services with its new partner. That pact combined the firms' financial and operational sides in an effort to strengthen Ceva's debt-laden balance sheet and to build a one-stop shop for customers in search of for integrated, end-to-end solutions, the companies said at the time.
Earlier this month, CMA CGM boosted its ownership stake in Ceva to one-third, following a failed takeover bid for Ceva by one bidder and a rejected bid by the Danish logistics giant DSV A/S.
Terms of the new deal were not disclosed, with the purchase price set to be determined by an independent appraisal. Following closure of the acquisition, Ceva will remain a publically listed company with an arm's-length business relationship with CMA CGM, the firms said.
According to CMA CGM, the deal will help Ceva in four ways, principally by allowing the firm to accelerate its reorganization and recovery plan by leveraging CMA CGM's operational expertise and its experience in corporate transformations.
With 56,000 employees, Ceva is a global, asset-light 3PL that had $7 billion of revenue in 2017 for its business lines in designing and operating supply-chain solutions for large and medium-size national and multinational companies.
In addition, CMA CGM said the deal would: create new commercial opportunities for Ceva by tapping into CMA CGM's position in the sea transport sector and its international commercial network; allow Ceva to achieve improved economies of scale by taking over CMA CGM's freight management activities; and help Ceva implement a digital and information technology (IT) transformation.
"We are convinced of CEVA Logistics' potential," CMA CGM CEO Rodolphe Saadé said in a release. "This industrial cooperation will make it possible to accelerate its required transformation and to make it a more profitable and efficient leader in logistics for the benefit of its clients, its employees, and its shareholders. It reconfirms CMA CGM as the reference shareholder as well as its long-term partner."
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