CMA CGM to buy FedEx third-party logistics arm for $1.4 billion
Major Acquisition Expands CMA CGM’s Logistics Presence
PARIS, July 1 (Reuters) - CMA CGM has agreed to buy FedEx's third-party logistics business for an enterprise value of $1.4 billion as the French shipping group seeks to expand its presence in the logistics sector and in the United States.
Deal Details and Strategic Impact
The deal is expected to close this year and will mean CMA CGM, through its CEVA Logistics subsidiary, will have about 150 warehouses and 20,000 employees in contract logistics in North America, it said in a statement.
U.S. Investment Program
CMA CGM last year announced plans to invest $20 billion in the United States over four years, winning plaudits from President Donald Trump, who has made a U.S. shipping sector revival a policy priority.
Position Among Top Warehouse Operators
The acquisition of FedEx Supply Chain was part of this U.S. investment programme and would place CMA CGM among the five biggest warehouse operators in the United States, CMA CGM Chairman and CEO Rodolphe Saade told Les Echos newspaper.
Partnerships and Revenue Opportunities
CMA CGM and FedEx also plan to develop partnerships under which the French company will be a preferred ocean carrier for FedEx in a non-exclusive agreement, CMA CGM said, adding that they will also collaborate on air cargo capacity.
Those partnerships represent potential additional revenue for CMA CGM of nearly $3.5 billion over 10 years, a source close to the matter said.
The air cargo and ocean freight agreements are expected to commence in phases between now and 2028.
Diversification and Industry Context
CMA CGM has pursued diversification into logistics, port terminals and non-transport activities to offset volatility in ocean shipping.
The world's third-largest container shipping line has faced upheaval in trade routes in recent years, including the virtual closure of the Strait of Hormuz during the Iran war.
FedEx’s Strategic Refocus
FedEx, in an effort to focus on its delivery business, spun off its trucking unit, FedEx Freight this month.
Media Coverage
CMA CGM's acquisition of the third-party logistics business was reported earlier by the Financial Times.
(Reporting by Gus TrompizAdditional reporting by Sabrina ValleEditing by Emelia Sithole-Matarise and David Goodman)