Friday, February 1, 2013

Container Shipping Giant Parts With Half of Terminal Handling Facility

Chinese Snap Up CMA CGM Subsidiary Share
Shipping News Feature

FRANCE – CHINA – Container shipping group CMA CGM has agreed to sell 49% of its container terminal subsidiary, Terminal Link, for €400 million to port operator China Merchants Holdings (International) Company Ltd (CMHI). The two companies signed the Share Purchase Agreement on the 25th January and, following some pre-closing reorganisation, the transaction is expected to be completed within the first half of 2013, subject to regulatory approvals. Terminal Link, a 100% subsidiary of the CMA CGM Group based in Marseilles, France, operates, develops and invests in a global network of 15 freight handling terminals located on the world’s key international shipping routes.

Terminal Link aims to provide best-in-class quality services in stevedoring, storage and other container-handling activities to the world’s largest shipping lines calling at its facilities. Terminal Link ranks twelfth worldwide based on its published throughput handled with a volume of 8.1million TEU’s handled in 2011. CMA CGM Chairman and Chief Executive Officer, Mr. Jacques R. Saadé commented:

“CMA CGM is very confident about this partnership with CMHI, which represents a unique opportunity to accelerate the Group development into terminal investments internationally. Since the beginning of CMA CGM presence in China, 21 years ago, the Group has always appreciated working with Chinese groups and this strong alliance confirms CMA CGM's willingness to pursue. The complementarity of CMA CGM and CMHI offers could allow both of us to develop international businesses.”

CMHI, the largest public port operator in China, invests in and operates port business from a portfolio located primarily in eight major cities along China Mainland's five most economically-active regions (via Shenzhen, Hong Kong, Shanghai, Ningbo, Qingdao, Tianjin, Xiamen and Zhanjiang). Added to its port portfolio, in recent years, are assets in Colombo, Sri Lanka and throughout Africa.

The total container volume handled by CMHI’s port portfolio exceeds 60 million TEU’s in 2012 and in this respect the two companies say investing in Terminal Link does not only represent a significant step for CMHI towards further internationalising its ports business, but also help to deepen the already mutually beneficially working relationship with a leading global container shipping group. CMHI Chairman, Dr. Fu Yuning, said:

"The transaction is consistent with CMHI's strategy and marks a significant step towards expanding our international footprint. Terminal Link’s strategic relationship with CMA CGM will help to ensure the long-term sustainability of its operations. Besides, Terminal Link's exposure to terminals in emerging markets and its potential pipeline of new projects present another driver for its volume growth and financial returns in the future.

“On the other hand, CMHI’s existing network of terminal operations in China and globally and the cargo flow business thereby captured will potentially complement and supplement the services offered by Terminal Link, thereby creating synergised benefits mutual to, not only both parties, but also the respective shipping customers of CMHI and of Terminal Link. In addition, the transaction reflects the closer working relationship we are forging with CMA CGM.”

Photo: Executives of the two companies sign the deal.