China Merchants Group Bids For A French Shipping Giant

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CMA CGM ANTOINE DE SAINT EXUPERY Arrival
China Merchants Group (CMG) that operates many key transportation infrastructures in Mainland China and Hong Kong, and very influential in five major ports in China including Pearl River Delta (Hong Kong, Shenzhen), Yangzee River Delta (Shanghai, Ningbo), Bohai Bay (Qingdao, Tianjin, Dalian), Xiamen Bay (Zhangzhou), and Southwest coastal area (Zhanjiang) is currently bidding to invest in port assets owned by French shipping company, CMA CGM.

It seems the state-owned firm is seeking to diversify geographically and boost capacity. In 2017, CMG’s container throughput was over 100 million TEU for the first time, which makes the company the Chinese biggest, and a world-leading terminal developer, investor and operator.

The company is the largest toll road investor and operator in China, which has invested in 8354 kilometers toll roads, bridges and tunnels in 19 provinces, namely Beijing, Tianjin, Guangdong, Zhejiang, Guang Xi etc. 18 National-class and provincial-class Research and Development Platforms have been launched to tailor full-chain toll road businesses covering exploration, design, construction, investment, operation, maintenance and service.

CMG prides itself as a leading central state-owned enterprise based in Hong Kong, under direct supervision of State-owned Assets Supervision and Administration Commission of the State Council.

Its business performance hit record high in 2018, with 648.4 billion RMB revenue, 11.1% up year-on-year, and 145 billion RMB total profit, 14.1% up year-on-year, ranking No.1 among all the SOEs. By the end of 2018, the company had the total assets of 8.00 trillion RMB, continuously ranking No.1 among all central SOEs.

It has been recognised as one of the eight Level-A SOE for fourteen consecutive years and the Excellent Performance Enterprise for four term of office. In 2018, China Merchants Group is listed in the Fortune Global 500 for its first time application, which has created a record of the most time-honored company in the list with its 146-year history.

China Merchants was founded in the Self-strengthening Movement in 1872. It is a pioneer in China’s national industry and commerce. Within 146-year history, The company set up the first merchant fleet, the first Chinese bank, the first Chinese insurance company etc., playing an important role in modern China.

In 1978, the company made great contributions to the opening-up by solely-investing and developing Shekou Industrial Zone, the first zone in China open to the world, and launching China Merchants Bank and Ping An Insurance Company, the first joint-tock Chinese bank and insurance company.

CMG is a conglomerate with three business platforms of non-financial industries, financial services, investment and capital operation. CMG’s non-financial industries cover ports, toll roads, shipping, logistics, real estate, zone development, offshore engineering and trade.

CMG actively participates in the national initiative of “the Belt and Road”, operating 53 ports in 20 countries and districts, creating a overseas network of ports, logistics, finance and industrial parks.

On the other hand, CMA CGM is a leading worldwide transport and logistics group present in more than 160 countries. Thanks to our agile organisation and unrivalled expertise, we are steering our business into the future with new partnerships, customer-centric innovations and state-of-the-art digitalisation.

It operates in Nigeria as CMA CGM Nigeria Shipping Limited, with head quarter in Lagos, the commercial capital of Nigeria, and branches in Onne, Rivers State and Kano to provide their customers with advanced global shipping solutions.

It connects Nigeria to the world through its 755 agencies worldwide via a six-weekly services calling Nigeria’s active seaports:  Apapa and Tincan-Island in Lagos and Onne in Port Harcourt.

CMG is however, considering spending at least several hundred million US dollars on the potential transaction. It may opt to do the deal through Hong Kong-listed unit China Merchants Port Holdings Company.

Analysts say any divestment will help CMA CGM reduce debt after its $1.7 billion acquisition of Switzerland’s Ceva Logistics AG. China Merchants Port bought a 49% stake in CMA CGM’s Terminal Link unit for about 400 million euros ($443 million) back in 2013.

The Terminal Link business, according to Bloomberg, runs about 13 container terminals in countries such as the U.S., France, Greece, Morocco and South Korea, according to its website. CMA CGM also owns CMA Terminals, which has 32 terminals globally either in operations or under construction.

CMA CGM’s 2025 euro bond rose 1.7 cents on the dollar to 78.5 cents, the highest level in two months, according to Bloomberg-compiled prices.

China Merchants Port develops, invests and operates ports across China, Hong Kong and Taiwan. It also has a presence in South Asia, Africa, the Mediterranean and South America. It counts about 36 ports in 18 countries and regions.

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