CMA CGM Moves to Grow Logistics Business Agreeing to Acquire UK’s Wincanton
France’s CMA CGM Group is continuing its strategy to expand beyond its shipping operations focusing on logistics and shoreside operations. Today they announced through their subsidiary CEVA Logistics an agreement to buy Wincanton, a leading supply chain and logistics company in the UK and Ireland, in a deal valued the company at nearly $720 million.
“As a leading and trusted supply chain partner for many well-known British and Irish brands, Wincanton perfectly aligns with the CMA CGM Group’s ambition to further expand its presence in this strategic region,” said CMA CGM Chairman and CEO Rodolphe Saade. He highlights that it will strengthen the group’s presence in the United Kingdom and Ireland while also creating new opportunities.
In addition to expanding the geographic presence, they highlighted that the deal will diversify CEVA Logistics’ customer base. Wincanton serves many of Britain and Ireland’s best-known brands. It has broad operations in retail, grocery, eCommerce, construction, infrastructure, energy, and the defense sectors. In addition to managing warehouses and logistics operations for major companies, Wincanton reports it has responsibility for a fleet of approximately 8,500 vehicles.
Reports are that CMA CGM had made several previous approaches to the board of Wincanton before winning their support for the call-cash offer which provides an approximately 50 percent premium to the current market value of the company. The board of Wincanton accepted the offer agreeing to recommend it to shareholders.
"In unanimously recommending this offer to shareholders, the directors believe it is in the interests of all the company's stakeholders,” said Sir Martin Read, Chairman of Wincanton. “While we remain confident in the long-term prospects of Wincanton and the wider sector, we recognize that the strong performance of the company has not been reflected in the performance of its shares in recent years. We therefore believe this offer represents the best opportunity for shareholders to realize the value of their investment with greater certainty."
The company is nearly 100 years old and operates at more than 170 sites across the country. Last year, the company had revenues of more than $1.8 billion and EBITDA of nearly $154 million. The company has demonstrated strong growth in the past few years with CMA CGM calling it “an attractive growth opportunity. The acquisition is reported to be in line with CEVA Logistics’ expansion strategy. It would more than double the size of CEVA’s UK operation which currently generates approximately $950 million in revenues. Worldwide, CEVA generates approximately $15 billion in annual revenue.
Since acquiring CEVA Logistics, CMA CGM Group has moved aggressively to expand the business following a similar strategy to A.P. Moller-Maersk which is also focusing on adding logistics to the traditional shipping business. Fueled by strong profits from the container shipping business in the past few years, CMA CGM has made several key acquisitions for CEVA Logistics, including the 2022 purchase of the commerce business from Ingram Micro. They also acquired GEFCO which is in vehicles and automotive logistics and recently launched vehicle transport operations with a charter for PCTCs, car carriers, from Eastern Pacific.
CMA CGM announced this acquisition before it closed the pending acquisition of Bollore’s logistics. They made a $5.5 billion bid for the freight management business which CMA CGM says it is poised to soon complete.