CMA CGM expands into Last Mile

‘Last Mile’ is increasingly the focus of logistics providers, even those logistics providers in areas such as shipping. The latest example is CMA CGM buying 51% of Colis Privé, the French home delivery specialist. The Marseille shipping company and owner of Ceva announced on Monday, January 31, that it had “entered into a preliminary agreement to acquire a 51% stake from the HOPPS Group in the Colis Privé Group, France’s leading player in deliveries to consumers. The agreement also gives CMA CGM the option of raising its interest in Colis Privé at a later date”. The HOPPS Group is a holding company created by the founders of Colis Privé, which also owns a number of other businesses. There seems to be no disclosure of the price paid for the purchase.

Colis Privé did attempt to float its equity on the Paris Stock Exchange in 2021, however, the offer was cancelled due to unfavourable market conditions. The company has a record of involvement with Amazon, with the Seattle giant once taking a majority stake in the company, although this has now shrunk to less than 10% of Colis Privé’s equity.

CMA CGM explained the purchase as boosting “CEVA Logistics’ expertise and service offering in e-commerce, a booming business area, and in parcel deliveries…In addition, the CMA CGM Group intends to accelerate the development of Colis Privé, especially at the international level, by leveraging its global presence and its first-class technological and logistics expertise”.  

Rodolphe Saadé, Chairman and CEO of the CMA CGM Group, commented that the purchase was “an important step in the development strategy of our logistics business. It will allow us to offer end-to-end logistics solutions to our e-commerce customers for whom the last mile is a critical step”.

These statements imply that CMA CGM will have management control over Colis Privé, yet CMA CGM will only own 51% of the equity of the home delivery company. Therefore, it seems probable that CMA CGM will purchase the whole company at some point in the near future. This would appear all the more likely if, as Rodolphe Saadé’s comments suggest, last mile capability is becoming an important part of CMA CGM and CEVA’s corporate strategy. It is also quite a significant development for a container shipping company that seemed to buy CEVA several years ago primarily for its freight forwarding capability.

Source: Transport Intelligence, 01 February 2022

Author: Thomas Cullen