French shipping group CMA CGM has agreed to buy a container terminal operator at the Port of Los Angeles, where the global supply chain turmoil has been most visible, in a deal worth $2.3bn including debt.
The Marseille-based company will take full ownership of Fenix Marine Services (FMS), buying 90 per cent of the company for $1.8bn, using its own funds. It adds to its existing 10 per cent stake in the company and deepens its foothold in the main US gateway for trade with Asia.
Rodolphe Saade, chief executive of CMA CGM, the world’s third largest container shipping carrier, said the industrial facility would help to strengthen its rapid growth in the US market and transatlantic trade.
“The swift recovery of the global economy has demonstrated the importance of ports and logistics infrastructure,” he said in a statement.
“In order to manage efficiently our port operations on the west coast of the United States, we have decided to acquire Fenix Marine Services.”
The ports of Los Angeles and Long Beach have been hard hit by chaos in global container shipping because of supply chain problems and the coronavirus pandemic. As of Tuesday, 77 container ships were at anchor or stranded at sea, outside the ports.
US president Joe Biden has been calling for logistics companies, port operators and large shippers to step up actions and investments to ease the supply chain bottlenecks restraining economic growth.
The FMS container terminal is one of the largest in North America, handling about 2.3m 20ft containers a year.
The company plans to invest in extending the terminal’s container yard and rail capacity, as well as building a new berth and digitising the facility further.
Container shipping companies are experiencing an earnings bonanza, driven by the supply chain disruption that has pushed up freight rates and squeezed the available supply of ships to move cargo.
Most container shipping companies have earned more in the most recent quarter than they have in the past decade.
The takeover follows moves by competitors such as Denmark’s Maersk to use bumper earnings to bolster their presence across the logistics supply chain including at ports, rail companies and warehouses. CMA CGM holds 49 investments in port terminals around the world.
The French company is returning as the owner of the terminal, after selling a 90 per cent stake for an enterprise value of $875m, which included debt, in 2017, when it was shoring up its finances following its takeover of Neptune Orient Lines, a Singapore-based shipping carrier.
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