CMA CGM to continue acquisitions after Brazilian port deal

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CMA CGM said it intends to make more acquisitions despite the looming threat of higher taxes for large companies in its domestic market, with the French shipping group announcing a $1.1 billion investment in a Brazilian port terminal operator.

CMA CGM, the world’s third-largest shipping group and cash-rich operator, is expanding into new areas such as logistics and media. It said on Monday it had agreed to acquire a 48% stake in Santos Brasil, with the ultimate goal of eventually taking over the entire group.

The deal follows a period of strong growth for CMA CGM, which has made it a target for politicians in France, including the far right. Le Pen’s Rassemblement National Marine party campaigned to end tax breaks for shipping groups in the run-up to France’s recent election, while newly installed Prime Minister Michel Barnier has opened the door to taxes on large companies to try to fix ailing public finances.

Rodolphe Saadé, chief executive of Marseille-based CMA CGM, said the group must continue to pursue long-term growth and would be required to pay tax on windfall profits in France if necessary.

“We are a family business, we look at the long term,” Saadé told reporters after the Brazilian deal. CMA CGM will buy an initial stake in Santos Brasil, whose assets include South America’s largest container terminal at the port of Santos, and then tender the remaining shares, in a deal worth more than $2 billion.

“I understand that there are political difficulties in France, but our goal is the future, it is a long-term investment,” he added. “If the government decides that there will be an exceptional contribution from large companies (in France), we will take our share.”

However, he warned that any change to the so-called tonnage tax in France would be punitive, as CMA CGM’s rivals in Denmark and Switzerland benefited from similarly favourable systems.

“If France were to do this, we would be at a disadvantage compared to our European rivals,” Saadé said.

This system, based on taxing the net tonnage of the fleet of vessels, helps protect maritime companies in times of instability when demand falls, but is beneficial because it is usually lower than corporate tax rates.

Saadé said his goal for CMA CGM was to “continue to grow the business,” including through acquisitions when the opportunity arose. The group expanded into media, buying the BFM television channel this year, cementing Saadé’s new status as one of France’s billionaires in the sector. Logistics has also become a larger part of the group’s portfolio and profits.

Under the Brazilian agreement, CMA CGM will gain access to three container terminals at the port, as well as other assets.

Freight prices have fallen from their peaks during the COVID-19 pandemic, which proved a haven for shipping companies, but lockdowns on Red Sea routes this year have kept rates stable and demand strong.

Saadé warned that 2025 could prove to be a more difficult year for the sector as more ship orders were delivered, resulting in additional production capacity that may not be used.

“2025 will be more complicated, but not because the global economy is slowing down,” he said.