Ambitious drive: Containers stacked up on the CMA CGM Benjamin Franklin vessel at the port of Antwerp, Belgium. The French firm is vying to take control of Brazilian ports operator Santos Brasil in a US$2bil move to bolster its presence in the region. — Reuters
PARIS: French shipping giant CMA CGM SA, backed by the billionaire Saade family, is vying to take full control of Brazilian ports operator Santos Brasil Participacoes SA in a US$2bil move to bolster its presence in the fast-growing region.
The world’s third-largest container line reached a cash deal to buy 48% of Santos Brasil from Opportunity Asset Management Ltda for around 6.3 billion reais and plans to launch a public offer on the remaining shares in the coming months, according to a statement on Monday.
Shares of Santos Brasil jumped as much as 19% in Sao Paulo, their biggest intraday gain in more than four years.
Acquiring the entire company would cost “more or less double” what CMA CGM is paying for the stake, chief executive officer Rodolphe Saade said on a call with reporters.
He added that the accord is part of a strategy to invest in terminals in a bid to lower waiting times and congestion for its own vessels.
Other shipowners could trigger a bidding war in the remaining stake, according to Daniel Gasparete, an analyst at Itau.
Saade has steered CMA CGM through a lively period of deal-making in recent years, using unprecedented gains made during the pandemic to add port handling and logistics capabilities, as well as media and air cargo assets.
In 2022 the acquisitive company bought two major US shipping terminals.
The deal for one of Brazil’s major port operators, whose assets include Tecon Santos, the largest container terminal in South America, will solidify the nation as a regional hub for CMA CGM, according to the statement.
“We are a family company and are in for the long-term,” Saade said. “We won’t fill the Brazil terminal today, but in a few years we’ll be able to.”
The country’s sustained economic growth is behind the decision to make such a large bet, he said, adding that he’s “not hesitating for one second” about Brazil and India.
The price amounts to 15.30 reais per share in Santos Brasil, a filing from Santos last Sunday said, adding that it could change based on criteria included in the contract.
The price represented a 20% premium on Santos Brasil’s 12.71 reais close last Friday.
Goldman Sachs expects the offer will be well-received by minority shareholders, analyst Joao Frizo wrote in a note to clients.
The deal for the stake is subject to regulatory approval and is expected to close in the first quarter of 2025. Messier & Associes advised CMA CGM on the deal.
The Saade family is worth about US$35bil, according to the Bloomberg Billionaires Index. — Bloomberg
