CMA-CGM Will Buy Ceva (Eventually), UPS and K+N May Have Concerns — Panjiva
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CMA-CGM Will Buy Ceva (Eventually), UPS and K+N May Have Concerns

Corp - Forwarders 157 Corp - Shipping 608 Global 722 Mergers 200 Mode - Containerized 1005 Mode - Seaborne 1273 U.S. 3297

CMA-CGM has announced a deepening of its strategic relationship with Ceva with a variety of industrial cooperation plans as well as a “voluntary offer” for Ceva shares at 30 swiss francs ($30) per share, a 33% premium to the last closing share price. That follows DSV’s decision to not pursue a bid for Ceva at the same share price. More details may emerge when Ceva Logistics reports its 3Q earnings on October 27.

For context Ceva Logistics’ revenues were 33.2% the size of CMA-CGM’s, S&P Global Market Intelligence data shows, though Ceva’s lower profitability means its EBITDA is only 15.1% of the scale.

CMA-CGM BRINGS GROWTH, PROFITABILITY LESSONS TO CEVA

Chart compares financial figures for CMA-CGM and Ceva Logistics. Calculations based on company financial reports. Most recent quarter for Ceva based on S&P Global Market Intelligence consensus estimates.   Source: Panjiva

A primary driver for the deal is the closer relationship between freight forwarding services and ocean carrier services in order to improve end-to-end customer service. That’s also driven Maersk’s recent restructuring, as outlined in Panjiva research of September 19. The new arrangement raises the question as to what position the new arrangement will leave CMA-CGM’s other freight forwarding counterparties in.

Panjiva data shows the largest freight forwarders utilizing CMA-CGM vessels on U.S.-inbound lines in the past 12 months were OEC (819.4k TEUs, or 2.9% of CMA-CGM’s volumes), UPS (611k TEUs) and K+N (474k TEUs). K+N in particular may choose to review its arrangements with CMA-CGM given its close ties – via a mutual shareholder – to CMA-CGM’s competitor Hapag-Lloyd.

OEC, K+N AND UPS AMONG LARGEST USERS OF CMA-CGM VESSELS

Chart segments U.S.-inbound container volumes on CMA-CGM vessels by NVOCC SCAC and port of lading country for the 12 months to Sept. 30 2018, denominated in TEUs.   Source: Panjiva

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