Global logistics provider CMA CGM Group is set to acquire FedEx Supply Chain in an international deal worth $1.4 billion.
The global sea, land and air logistics provider will acquire the subsidiary of FedEx Corp at an enterprise value of $1.4 billion, with the deal expected to close this year.
The move would nearly triple the size of the North American contract logistics operations of CEVA Logistics, a subsidiary of CMA CGM.
The acquisition reinforces CMA CGM’s more than 25-year commitment and investment in the United States supply chain and accelerates its strategy to provide comprehensive end-to-end logistics solutions.
By integrating FedEx Supply Chain’s assets and nearly 10,000 team members, CEVA Logistics will become a leading contract logistics provider in North America.
The combined entity would operate approximately 150 warehouses, expanding CEVA’s overall presence in North America to a combined workforce of 20,000 people located at more than 240 locations.
Following the execution of this transaction, CMA CGM and FedEx expect to also enter into multi-year commercial agreements related to air and ocean freight, with CMA CGM to become a preferred ocean carrier for FedEx, offering ocean transport and carrier services under a non-exclusive agreement.
The companies will also work together on select air cargo capacity solutions to enhance their respective global networks in the interest of higher aircraft utilization and flexible long-haul capacity.
“The acquisition and partnership with FedEx represent a major step in the development of CEVA Logistics and our logistics activities in North America,” CMA CGM CEO and chairman Rodolphe Saadé says.
“We are strengthening our ability to provide customers with integrated supply chain solutions. These deals also reinforce our long-term commitment to investing in the United States and supporting the resilience and efficiency of its supply chain.”
FedEx CEO and president Raj Subramaniam says the announcement allows FedEx to increase its focus on providing expertise for the healthcare, automotive, aerospace and data centre sectors.
“By streamlining our portfolio, FedEx is better positioned to execute our long-term vision and continue to serve as the heartbeat of the industrial economy, delivering unmatched connectivity, reliability and value to our customers globally,” he says.
“We look forward to leveraging our complementary relationship with global logistics solutions provider CMA CGM to support the next chapter for FedEx Supply Chain and its team members.”