Brazil: terminal sales?

Amidst a sea of speculation over a Bloomberg article that revealed a key shareholding was about to be sold to PSA International, the global port operator, Wilson, Sons, the variegated shipping group based in Brazil has just returned record profits of Reais404.9M (US$80.2M) for 2023, up 19.5% over the previous year, and the share price has jumped 78% in a year.

During the recent Intermodal South America trade show, and prior to it, there was also much talk of Santos Brasil – still the biggest port operator for containers in the South American country – being sold to Terminal Investment Limited (TIL), the port operations arm of MSC, but the two parties are reported by informed sources, “not to have been able to agree a price.”

Santos Brasil has also returned very good figures for the fourth quarter (Q4) of 2023 and for the full year in conjunction with its container operations (in Santos, Imbituba and Vila do Conde). As PS went to press the share price was Reais13.41 per share, up 40% over the past three months.

Some commentators suggest that the recent hike in the share prices for both companies is the main reason why sale prices cannot be agreed upon. It is understood that with Wilsons it is the 56.5% shareholding of Ocean Wilsons – owned mostly by the Salomon family, headed by William – that is up for sale.

“PSA would probably be a better fit for Wilson, Sons than MSC as its sister company, PSA Marine, operate a fleet of [80] tugs globally and so this offer is a much more serious one than those from last year,” says a maritime consultant based in Sao Paulo, who has for many years been monitoring the entrance of global players into the once insular Brazilian market. Santos Brasil and Wilson, Sons are the only sizeable container terminals still in local, mostly Brazilian, hands, especially after Libra Terminais closed for business five years ago, with PSA showing interest in that facility at the time.

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“On top of all this the Brazilian economy is picking up faster than expectations, following the new interventionist government of Lula [from January 2023], and in a very volatile world Brazil is now seen as a fairly safe bet for investment. It is understood that a Chinese company, possibly China Merchants, is also showing some interest in Wilsons, but PSA are favourites to take over.”

Last summer PS reported that Wilson, Sons had received an offer for its entire business portfolio – which includes Offshore Support Vessels and a shipyard as well as tugs and port terminals – from MSC, and the company admitted there had been talks but nothing concrete. This year they have repeated, officially, that some offers of a “non-binding” nature have been made through their advisers, Banco BTG Pactual SA, but nothing has yet been agreed and they are considering “all potential strategic options.” Wilsons has also issued two “clarifications” to stories in the Brazilian media and Bloomberg along the same lines.

And it is well known within Brazilian port circles that MSC and Maersk are manoeuvring to dismantle their long-standing global co-operation agreement and that this will impact on the BTP box terminal joint venture (on the right bank of the port of Santos) at some point.

The consensus amongst insiders is that either Maersk or MSC will probably take over Santos Brasil’s Tecon Santos facility (on the left bank of Santos port) and the company that doesn’t will be allowed to take over an extra land area to allow BTP to achieve significant expansion. This is a legacy from the failed STS10 new tender project. Sources at Santos Brasil say they cannot comment as it is a listed company.

It is common knowledge that PSA is “dying to get its hands on a Brazilian port terminal,” to add to its growing world-wide portfolio, especially in Latin America: including Exolgan in Buenos Aires, Argentina, SPI Aguadulce in Colombia and PSA Panama International Terminal (PPIT). The Singaporean outfit already has offices and inland freight terminals in Brazil but still doesn’t have a quayside terminal, but it’s not for the want of trying. Several times PSA have tried to bid for port facilities in Brazil, mostly in Santos (where Wilson, Sons has a shipyard) but failed to follow through. With the Ocean Wilsons shares seemingly up for grabs this could be the best opportunity for PSA to finally breakthrough into Brazil’s terminal operations arena – at a price!