CMA CGM Aims for Ceva Logistics Breakeven in 2019
CMA CGM is aiming for Ceva Logistics to break even this year, its finance chief said on Tuesday, as the French shipping group opened a share offer to cement its control of the Swiss freight specialist.
CMA CGM's public tender will offer other shareholders 30 Swiss francs ($29.75) per share, valuing Ceva at 1.67 billion francs, a price agreed after Ceva rejected a takeover bid in October from Danish freight firm DSV.
Marseille-based CMA CGM, one of the world's largest container shipping lines, became Ceva's core shareholder when the Swiss company floated on the Zurich stock market last year, as part of a push to expand in non-maritime freight services.
"Our wish is to stand on two feet - one in shipping and one in logistics," CMA CGM's Chief Financial Officer Michel Sirat told Reuters by telephone.
CMA CGM and Ceva in November announced plans to expand their logistics activities and boost the Swiss firm's profitability, including through cross-selling and standardised IT systems, and Sirat said the companies had agreed to target "a breakeven in 2019" for loss-making Ceva.
Depending on the outcome of the share offer, CMA CGM expects to invest around 1.5 billion Swiss francs in building its controlling stake in Ceva, the CFO said.
CMA CGM has already secured majority control ahead of the tender offer through derivatives that will take its holding to 50.6 percent from 33 percent.
A particularity of the share offer is that it is not being recommended by Ceva's board, with the agreement of CMA CGM, on the grounds that the partners' business plan has the potential to boost the share price to a midpoint of 40 francs.
The Ceva acquisition marks the second major deal orchestrated by Rodolphe Saade, chairman and chief executive of family-owned CMA CGM.
Saade led the $2.4 billion takeover of Singapore-based container line APL in 2016, as part of a series of consolidation deals during a downturn in the shipping sector.
He took over as CEO in 2017, succeeding his father and company founder Jacques who died last year.
(Reuters, Reporting by Gus Trompiz; editing by David Evans)
