CMA CGM to acquire major Los Angeles container terminal

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  • CMA CGM to acquire Fenix Marine Services, a key terminal in Los Angeles, California, in a move to boost the carrier’s position as a global port operator
  • The 90% stake in FMS terminal currently held by EQT Infrastructure III will be acquired based on an enterprise value of US$2.3 billion
  • The carrier plans to accelerate the terminal’s development in the coming years

French shipping giant CMA CGM has signed an agreement to acquire 90% stake in the Fenix Marine Services (FMS) terminal in Los Angeles, California as the container carrier seeks to strengthen its position as a global port terminal operator, particularly in the key transpacific trade.

The 90% stake in FMS terminal is currently held by EQT Infrastructure III, and CMA CGM has agreed to make the purchase based on an enterprise value of US$2.3 billion. CMA CGM expects to pay out around $1.8 billion for the deal.

Currently holding a 10% stake in the terminal, CMA CGM will become sole owner of the FMS facility post-transaction closing, the container shipping liner said in a November 3 statement.

FMS is the third largest terminal in the Los Angeles/Long Beach port area in terms of capacity (around 2.5 million TEUs) and one of the largest in North America. The terminal also benefits from a long-term concession agreement through 2043.

The deep-water terminal has these infrastructure features:

  • 4 berths, each more than 1,000 feet long and with a draft of 50 feet
  • 16 cranes, 8 of which are capable of serving very large ships
  • 8 rail tracks located within the terminal, ensuring first-class rail connectivity
  • A 292-acre container yard
  • More than 700 reefer plugs with 24/7 reefer monitoring

After closing,  CMA CGM will take over the operations of the industrial facility with plans to accelerate significant investment in its development in the coming years. Part of the plan includes the following:

  • Extend the container yard to increase the terminal’s capacity in a staged approach
  • Expand the terminal’s rail capacity  to create one of the largest rail infrastructures in the United States
  • Construct a new berth
  • Continue the terminal’s digital transformation

By early 2022, the FMS terminal will welcome the first CMA CGM liquefied natural gas-powered 15,000-TEU ships to be deployed on routes between Asia and the United States, the release said.

The closing of this transaction remains subject to the approval of the competent regulatory authorities.

The Marseille-based shipping company is awash with cash as a shipping capacity squeeze has sent freight rates surging to record highs.

“With this acquisition, funded from its own resources, CMA CGM is bolstering its position as a global port terminal operator. Currently, the Group has investments in 49 port terminals in 27 countries, through its two subsidiaries CMA Terminals and Terminal Link (joint venture),” the statement said.

“The swift recovery of the global economy has demonstrated the importance of ports and logistics infrastructure. In order to manage efficiently our port operations on the West Coast of the United States, we have decided to acquire Fenix Marine Services,” Rodolphe Saadé, chairman and CEO of the CMA CGM group, said.

Noting that FMS is one of the largest terminals in the US and one of its most strategic gateways, Saadé added that it “is a key industrial facility which will significantly strengthen our position and support our rapid growth in this market.”

Photo by Bahnfrend