© Reuters. FILE PHOTO: A fisherman travels on a boat in front of a CMA CGM container ship passing through the Suez Canal in Ismailia, Egypt, July 7, 2021. (Reuters) / Amr Abdullah Dalsh / File Photo
PARIS (Reuters) – Shipping group CMA CGM has agreed to acquire the Fenix Marine Services (FMS) container terminal in the Port of Los Angeles in a deal worth nearly $2 billion that will expand its presence in an important hub for trans-Pacific trade.
CMA CGM and EQT said Wednesday that CMA CGM currently owns a 10% stake in FMS and will purchase the remaining 90% of EQT (NYSE:: Infrastructure) Investment Fund III based on an enterprise value of $2.3 billion.
It added that France-based CMA CGM, one of the world’s largest container shipping lines, expects to pay about $1.8 billion for the 90% stake and will finance the deal with its own money.
The Port of Los Angeles is handling huge freight volumes between China and the United States and has been caught in growing freight congestion as the coronavirus pandemic disrupts global supply and demand for goods.
FMS is the third largest container terminal in Los Angeles and its acquisition will add to the 49 terminals in which CMA CGM already has investments worldwide, it said.
“The rapid recovery of the global economy has demonstrated the importance of ports and logistics infrastructure,” said Rodolphe Saadeh, Chairman and CEO of CMA CGM, in a statement.
“It (FMS) is a major industrial facility that will significantly enhance our position and support our rapid growth in this market.”
CMA CGM will act as terminal operator for the FMS and plans to invest in expanding the site’s capacity, in particular by building a new ship berth, expanding the container yard and increasing rail capacity for forward transport.
Like its freight competitors, CMA CGM has expanded its presence along the logistics chain into port infrastructure and non-sea transportation services.
Its profits have soared this year as the pandemic has driven up freight rates and saturated vessels’ capacity.
The acquisition of FMS, which is subject to regulatory approval, marks a return to CMA CGM’s ownership of the station it sold to EQT in 2017.
CMA CGM divested a 90% stake in the company’s $875 million value as it looked to bolster its finances following its acquisition of Singapore-based NOL shipping line.
The $2.3 billion project value in the new deal represents 13.7 times FMS’s projected earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2022, according to CMA CGM.
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