French shipping and logistics group CMA CGM has agreed to acquire FedEx Supply Chain for an enterprise value of US$1.4 billion (R23 billion), with the company saying the acquisition will significantly expand CEVA Logistics' contract logistics operations in North America and strengthen its ability to provide integrated supply chain solutions.
The acquisition, which is expected to close later this year subject to regulatory approvals, will nearly triple the North American contract logistics operations of CMA CGM subsidiary CEVA Logistics, according to the companies.
By integrating FedEx Supply Chain's assets and nearly 10 000 employees, CEVA's North American network will expand to about 240 locations with a combined workforce of 20 000 people.
The companies also announced plans to enter into multi-year commercial agreements covering ocean freight and air cargo. Under the arrangement, CMA CGM will become a preferred ocean carrier for FedEx under a non-exclusive agreement, while the two companies will collaborate on selected air cargo capacity solutions to improve aircraft utilisation and long-haul capacity. The agreements are expected to be phased in through 2028. Reuters reports that the ocean and air freight arrangements could generate nearly US$3.5 billion in additional revenue for CMA CGM over 10 years.
The acquisition forms part of CMA CGM's strategy to expand beyond container shipping into integrated logistics. The group said it had been building its end-to-end logistics offering since acquiring CEVA Logistics in 2019, expanding its presence across warehousing, freight forwarding, air cargo and inland transport.
