French container shipping giant CMA CGM has agreed to buy a majority stake in Fenix Marine Services (FMS), one of the largest terminals in the Port of Los Angeles that provides container handling services to shipping lines.
The 90 per cent stake will be bought for $2.3 billion from EQT Infrastructure III fund, a close private equity fund managed by EQT.
Currently holding a 10 per cent stake in the terminal, CMA CGM will become sole owner of the FMS facility post-transaction closing.
The closing of this transaction remains subject to the approval of the competent regulatory authorities.
“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, commented.
“Fenix Marine Services is one of the largest terminals in this country and one of its most strategic gateways. It is a key industrial facility which will significantly strengthen our position and support our rapid growth in this market.”
As explained, the investment is in line with the CMA CGM Group’s strategy of developing its terminal business while supporting the growth and efficiency of its shipping lines, and increasing service quality for its clients, in a context that requires a comprehensive approach to the supply chain.
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).
Under EQT Infrastructure’s ownership since 2017, FMS is the third-largest terminal in the Los Angeles/Long Beach port area in terms of capacity (around 2.5 million TEU) and one of the largest in North America. The terminal also benefits from a long-term concession agreement (through 2043).
Since the acquisition, EQT has undertaken a series of initiatives to help position the platform for long-term success. A focus on value creation and digitization has resulted in significant operational improvements, including a 20 percent increase in gross moves per hour. Environmental upgrades have also eliminated over ten million pounds of greenhouse gases to date.
After closing, the CMA CGM Group will take over the operations of this strategic industrial facility with the goal of improving its service quality.
As part of its plan, the group will accelerate FMS’ development with significant investment in the coming years:
• extension of the container yard to increase the terminal’s capacity in a staged approach,
• expansion of the terminal’s rail capacity in order to create one of the largest rail infrastructures in the United States,
• construction of a new berth, continuation of the terminal’s digital transformation.
By early 2022, the FMS terminal will welcome the first CMA CGM liquefied natural gas- (LNG) powered 15,000 TEU ships to be deployed on routes between Asia and the United States.