CMA CGM has announced it reached a binding agreement with Maersk Line to acquire Mercosul Line, a leading player in Brazil’s domestic container shipping market.
Earlier this year, Maersk Line declared the intention to sell its Brazilian cabotage carrier in order to remove any possible concerns from competition regulators over its acquisition of German shipping line Hamburg Süd. In Brazil, Hamburg Sud has its own subsidiary, Alianca, which is the market leader for cabotage along the Brazilian coastline, according to the German shipping Group. Had Maersk maintained control of Mercosul Line and gained Alianca, it would have controlled 80% of the East Coast South America cabotage and coastal market.
The current Mercosul transaction will ensure that the cabotage sector in Brazil remains competitive and customers continue to benefit from a comprehensive choice of carriers, says the press release of CMA CGM.
The deal is subject to Brazilian regulatory approval and the closing of Maersk’s Hamburg Süd acquisition. CMA CGM expects the integration of Mercosul Line to start in Q4 2017, at the same time as the Hamburg Süd integration. Until then, Mercosul Line will continue business as usual.
The price of the sale is not disclosed.
Rodolphe Saadé, Chief Executive Officer of CMA CGM, called the acquisition of Mercosul a milestone in CMA CGM’s development strategy in South America. “It is a well-managed company and we will leverage this platform to expand our footprint and service offerings to and from Latin America, seizing opportunities linked to the high growth prospects in this region,” he said. “As a result, CMA CGM will be able to propose complete door-to-door services continue providing best-in-class services to its customers.”
This transaction follows CMA CGM’s acquisition of Singaporean shipping company Neptune Orient Lines (NOL) last year.
Launched in 1996 and acquired by Maersk in 2006, Mercosul Line specializes in the Brazilian internal transport market. Its fleet of 4 ships operates in Brazil and South America. Mercosul employs 92 land based staff and 160 seafarers. In 2016 the company reported revenues of USD 128 mln.