After one of the longest courtships in port terminal history, involving many suitors, it looks like Santos Brasil will finally be taken over by French based liner company CMA CGM, for an initial outlay of around US$1.12BN and an eventual cost of approximately US$2.26BN.
The global carrier, which already has significant interests in Brazil (employing a workforce of more than 10,000 in eight offices) has signed an agreement offering to buy just under 48% of the shares of the Sao Paulo stock exchange (Bovespa) listed Santos Brasil, and reliable sources in Santos say the majority of shares will fall into their hands “in the near future”.
For nearly 10 years South America’s biggest container terminal outfit, which includes the largest terminal in Brazil (Tecon Santos, with 1.832M TEU handled in 2023, for a 38% share of all Santos), has been courted by the world’s leading terminal operating companies and shipping lines -including Maersk, MSC, Hutchison, and China Merchants Port Holdings, among others – and finally one of its suitors has stepped forward and made a concrete bid.
The French outfit has offered to buy (at Bovespa on September 23) 47.55% of the shares, all owned by chief shareholder Opportunity Group. At Reais15.30 a share (higher than the closing price of Reais12.71) the total cost to CMA CGM will be around Reais6.33BN (US$1.12BN) and more than double that if they buy the rest of the shares.
For its money it will get the 2.5M TEU per annum capacity Tecon Santos terminal, TEV, a car terminal in Santos, Tecon Imbituba (for boxes and general cargo) in the south of Brazil, Tecon Vila do Conde (in the North region), a liquid bulk terminal in Itaqui (North region) and a growing logistics subsidiary, that will tie in with CEVA Logistics, which is also well established in Brazil, with a 7500 strong workforce.
In the first seven months of this year Tecon Santos increased its market share from 38% up to 41.3% of the 3.094M TEU handled up to end of July 31, 2024. This was at the expense of BTP (a joint venture between regional rivals MSC and Maersk), whose market share fell from 39% to 34.9% due to operational difficulties.
For the 12 months to June 30, 2024, Santos Brasil generated Reais2.55Bn in revenue and EBITDA was Reais1.28BN.
CMA CGM bought Mercosul Line, from Maersk, back in December of 2017, and has been ramping up its Brazilian operations even more since then. It is especially keen to continue improving and expanding its cabotage and Mercosur coastal services from the River Plate/south of Brazil to Manaus, in the state of Amazonas. As the Santos Brasil group includes the Tecon Vila do Conde box terminal, on the outskirts of Belem (at the mouth of the Amazon River), it will tie in with Mercosul Line and CMA CGM’s growing business in Manaus (a city in the heart of the Amazon jungle with a 2.4M population). Last year and this year, severe droughts have hampered ship calls through the 1200 Km from the mouth of the Amazon to Manaus and Vila do Conde has been an important back-stop port for vessels to transship onto barges for the onward journey.
The CMA CGM offer for the Santos Brasil shares is subject to the usual Brazilian regulatory checks (from CADE, the monopolies watchdog and from Antaq, the Waterways and Ports regulator) but it is expected to pass those without hindrance or delay.
