Groups ‘can now fully engage’ in expanding their commercial cooperation and developing complementary services.
CMA CGM has obtained all the necessary regulatory approvals required in connection with its planned investment in CEVA Logistics, unveiled in April, meaning the two groups “can now fully engage” in expanding their commercial cooperation and developing complementary services, CEVA Logistics said today.
The freight forwarding and logistics group explained that CMA CGM, the third-largest container shipping group in the world, had made a strategic investment in convertible securities issued by CEVA in a concurrent private placement at the time of CEVA’s initial public offering (IPO) on the SIX Swiss Exchange, adding: “CMA CGM has now obtained all required regulatory approvals and the securities will be converted into registered ordinary shares in the coming days. Following conversion, CMA CGM will hold 24.99% of CEVA’s share capital.”
CEVA also revealed that CMA CGM had entered into “a lock-up agreement” for one year following the IPO and has agreed not to increase its shareholding in CEVA for six months post-IPO.
In terms of the two groups’ plans for strategic cooperation, CEVA said the companies “will work together to expand their commercial cooperation and to develop complementary services, which address the increasing customer need for integrated end-to-end solutions. Both companies explore arms-length cooperation and believe that the partnership could create significant value to customers and would be mutually beneficial to both companies.”
CEVA’s CEO, Xavier Urbain, commented: “It is good news that regulatory approvals have been obtained so quickly and we can now fully engage. We are excited about the partnership with CMA CGM.”
CMA CGM’s planned $390m-$426m investment in CEVA Logistics 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 with the aim to become an ‘integrated container transport and logistics business’.
However, as reported in Lloyd’s Loading List, container shipping analyst Alphaliner has warned that previous moves by container shipping lines to forge closer co-operation with their own logistics service providers have produced mixed results. It noted: “The two largest carrier-linked third party logistics operators, Damco and APL Logistics, have struggled to find clear synergies with their carrier counterparts.
“Damco has struggled to find a profitable niche for itself within the Maersk network while APL Logistics was sold to Kintetsu World Express by its parent company NOL in 2015.”