CMA CGM Bolsters UK Logistics Foothold with $718M Acquisition

Glenn Taylor
·4 min read

In the same week it had a setback to its international expansion efforts upon abandoning its air cargo alliance with Air France-KLM, container shipping giant CMA CGM is rebounding with a big splash to strengthen its logistics presence in the U.K.

Through its third-party logistics (3PL) subsidiary Ceva Logistics, the privately held CMA CGM is acquiring U.K.-based logistics services company Wincanton for 566.9 million pounds ($718.3 million) in all-cash deal.

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Already firmly established in the U.K., the France-headquartered Ceva Logistics would further escalate competition with other major logistics service providers including DHL, GXO and Kuehne + Nagel, all of which have significant presences in the market.

Ceva Logistics generates roughly $950 million of annual revenues in the U.K., with its contract logistics business bringing in $500 million and the ground and rail services business driving an additional $290 million. Ceva’s U.K. branch operates more than 5.4 million square feet of warehouse space in the contract logistics business, and delivers more than 550,000 shipments per year via ground and rail.

Wincanton is certainly a company that can put Ceva Logistics in a pole position to increase market share, generating 1.46 billion euros ($1.85 billion) of revenue with net income of 33.2 million euros ($36.1 million) in its last fiscal year. The company brings substantial storage and vehicle capacity to Ceva, already operating 170 sites across the country and owning 8,500 trucks and trailers.

Ceva said the deal would further develop its presence in contract logistics in the U.K. and Ireland, diversify its customer base and help it offer end-to-end logistics solutions to both SMBs and major blue-chip clients. Wincanton brings significant global apparel and home retail clients into Ceva’s stable, including Ikea and Primark, as well as supermarkets Asda and Waitrose.

The England-based company offers a range of outsourced and integrated supply chain solutions across four sectors: e-fulfillment; grocery and consumer goods; general merchandise; and public and industrial.

“Wincanton’s commitment to their people drives their success in the U.K. contract logistics market. At Ceva Logistics, we accomplish our mission through the diverse, talented people we have working in the U.K. and around the world,” said Mathieu Friedberg, CEO of Ceva Logistics, in a statement. “In addition to the innovative logistics solutions that we could develop and offer together, we would be optimally positioned to answer even more supply chain challenges for our combined set of U.K. customers.”

CMA CGM, like its European-based container shipping rivals Mediterranean Shipping Company (MSC) and Maersk, has been making a concerted push in recent years to expand its logistics services beyond ocean freight in the wake of record profits and cargo movement during the Covid-19 pandemic.

CMA CGM’s roughly $2 billion acquisition of Ceva Logistics in 2019 set the tone for a busy acquisition spree when the pandemic spread worldwide late that year.

With plenty of cash on hand, the world’s third-largest container shipping company scooped up e-commerce contract logistics and fulfillment business Ingram Micro Commerce & Lifecycle Services for $3 billion in 2021, the same year it launched its air cargo unit. In 2022, the logistics provider acquired two terminals at the Port of New York and New Jersey.

Last year, the company set up its biggest deal yet. The ocean freight firm’s $5.5 billion mega-acquisition of French logistics giant Bolloré is still yet to close.

CMA CGM is one of the few remaining ocean carriers to keep some of its vessels flowing through the Red Sea since November, when ships in the waterway began to endure ongoing attacks by Houthi militants out of Yemen.

The company said Friday that its NEMO service, which connects vessels from Northern Europe and the Mediterranean Sea to Australia and New Zealand, will temporarily stop crossing the Suez Canal and reroute via the Cape of Good Hope in both directions.

The change was part of contingency measures on several services that usually cross the Suez Canal, CMA CGM said in a customer advisory on its website.

“Our schedules are in complete disarray and we’re not able to stick to our timings because sometimes we’re passing around Good Hope and sometimes we’re having to wait to pass [the Red Sea],” Rodolphe Saadé, owner and chair of CMA CGM, told the Financial Times.

Upon returning to Red Sea in late December, CMA CGM has had several ships escorted through the waterway by the French navy.

Wincanton said its board intends to unanimously recommend that its shareholders vote in favor of CMA CGM’s bid, which would lead to the U.K. company being delisted from the London Stock Exchange.