CMA CGM to cash in $817m on sale of 90% stake in LA terminal

Following the completion of the transaction, CMA CGM will remain a minority shareholder holding 10% of the GGS terminal, which it acquired last year as part of acquiring Singapore’s Neptune Orient Lines (NOL).

Farid T. Salem, executive officer of CMA CGM, commented: “The terminal will remain an important part of our industry leading logistics network, and will have an opportunity to grow alongside CMA CGM.

“Throughout the sales process, EQT Infrastructure and P5 expertise have focused on growth in addition to a responsible, hands-on ownership approach, which we consider highly beneficial to our future partnership.”

CMA CGM will receive a cash consideration of $817m to be paid at closing at an enterprise value of $875m. The terms of the transaction terms also provide for CMA CGM to receive additional deferred, contingent cash consideration of which sequence and quantum will depend on GGS’ future operating and financial performance.

CMA CGM and its subsidiaries entered into a long term industrial partnership and utilization agreement with EQT Infrastructure and P5, allowing the group to remain a major user of the terminal with preferential conditions.

The disposal of GGS enables CMA CGM to complete the financial deleveraging plan communicated in December 2015 upon announcement of the NOL’s acquisition. CMA CGM pointed out that the transaction is in line with the group’s strategy to focus on its shipping business while securing its operations through shared ownership of key terminals.