CMA CGM expands footprint in Brazil with latest stake acquisition

French shipping colossal CMA CGM is set to strengthen its position in Brazil’s maritime sector with the purchase of a nearly 48% stake in Santos Brasil Participações, a major Brazilian multi-terminal operator, from funds managed by Opportunity Funds.

The deal, expected to close by early 2025 pending regulatory approval, is projected to give CMA CGM—which deploys a large number of liquefied natural gas (LNG) vessels in Brazil—control over operations at South America’s largest container terminal, Tecon Santos, and several other ‘key’ port facilities across Brazil.

Santos Brasil currently manages a portfolio of eight assets on the Brazilian coast, including three container terminals, one vehicle terminal, one liquid bulk terminal as well as three logistics facilities, all located in the ports of Santos, said to handle 40% of Brazilian volumes, Imbituba, Vila do Conde, Itaqui and in the state of São Paulo.

Among the terminals, Tecon Santos is reportedly the largest container terminal in South America. Located in the Port of Santos, it is said to benefit from ‘first-class infrastructure’.

As disclosed, the terminal is under a long-term concession agreement – until 2047 – and it boasts a capacity of 2.5 million TEUS, expected to be expandable in the near future to 3.0 million. The terminal also possesses three berth slots, allowing it to handle 14,000 TEU ships.

A long-time player in the Brazilian maritime sector, CMA CGM developed its activities in the country over time, with one important step being the acquisition of Mercosul, described as a ‘historic’ Brazilian shipping line. Mercosul Lines now connects several large global destinations with 10 weekly mainline services across 14 ports.

Around five years ago, the French shipping titan bolstered its position in Brazil by extending its logistics arm, CEVA Logistics into the Brazilian market. Presently, as CMA CGM has revealed, this logistics arm employs thousands of the country’s working professionals.

CMA CGM’s acquisition of Santos Brasil, thus, represents one step in a sequence of deliberate moves for the French company as it sails toward its future targets. According to the company, there are plans well underway to further develop line calls in its Brazilian terminals, while further upping its offering to the country’s exporters as well as importers.

Moreover, CMA CGM has highlighted the expansion potential of Tecon Santos. The company reportedly intends to speed up investments in all of the Santos Brasil terminals, including Tecon Santos, in order to increase their combined capacity in the coming years. This is planned to be done in collaboration with port authorities and other Brazilian regulatory bodies.

As informed, the overarching goal of these efforts is ‘pursuing the decarbonization plan already initiated by Santos Brasil’.

Following completion of the acquisition, CMA CGM has revealed that the company would launch a mandatory tender offer on all other Santos Brasil shares. The offer would be on the same terms, in line with Brazilian market rules.

CMA CGM presently serves over 400 ports across the globe, according to the company’s data, with a fleet comprising more than 620 vessels, including the recently delivered 13,000 TEU LNG dual-fuel containership CMA CGM Amazonia built by Hudong-Zhonghua Shipbuilding in China.

The vessel was welcomed in August this year, marking the end of Hudong-Zhonghua’s shipbuilding project for the French company. The LNG dual-fuel power system CMA CGM Amazonia is said to be fitted with a new generation of intelligent control exhaust gas recirculation (ICER) system with a potential of reducing greenhouse gas (GHG) emissions by more than 28%.