The Ceva Logistics-Wincanton acquisition that is expected to bring French ocean carrier giant CMA CGM further into the U.K. is not a done deal—with a bidding war possibly on the horizon.
According to Wincanton, GXO has indicated that it is considering making a proposal for a cash offer to acquire the England-based logistics services company.
“[GXO] has not provided the board of Wincanton with any formal proposal relating to a possible offer, including as to terms or price,” Wincanton said in a filing with the London Stock Exchange Monday. “If any such proposal is provided by GXO the board of Wincanton will carefully consider its terms, in conjunction with its advisers.”
Related Stories
GXO would not comment on the matter, but the potential proposal seems to have lit a fire under Ceva, which preemptively countered with a new offer of its own.
For now, the Wincanton board is standing pat amid a new “increased and final” cash offer by Ceva, the third-party logistics (3PL) subsidiary of CMA CGM.
Ceva Logistics increased its bid to 4.80 pounds per share, or approximately 605 million pounds ($767 million), ahead of the 4.50 pounds per share, or roughly 567 million pounds ($719 million). This represents a premium of 62 percent to the group’s pre-offer closing price.
Wincanton stock shot up more than 11 percent Monday after the company confirmed the potential competing proposal.
Sourcing Journal reached out to CMA CGM.
Already operating 170 sites across the country and owning 8,500 trucks and trailers, Wincanton would expand the breadth of either company in the U.K.
GXO is currently a much bigger player in the market than Ceva. Thanks to its $1.3 billion acquisition of Clipper Logistics in 2022, the U.K. is GXO’s largest market by revenue despite the company being based in the U.S.
Across 2023, the contract logistics provider generated $3.7 billion in the U.K., which represented 37 percent of total revenue for the company, ahead of the 30 percent the U.S. business reels in per year. As of Dec. 31, 2022, GXO operated in 316 facilities in the U.K., estimated at 40 million total square feet.
In comparison, Ceva generates roughly $950 million in annual revenues in the market, according to CMA CGM. As far as warehouse space goes, Ceva’s U.K. branch operates 5.4 million square feet of warehouse space in the country.
Wincanton, which exclusively serves the U.K. and Ireland, generated 1.4 billion pounds ($1.8 billion) in its last 12 months. With Wincanton, comes major apparel and home retail clients, including Ikea and Primark, alongside supermarkets Asda and Waitrose.
CMA CGM has had an eventful stretch of days, with the logistics firm getting the go-ahead Friday from the European Commission to complete its $5.5 billion acquisition of Bolloré Logistics.
To address concerns from the committee about reduced competition in specific markets, the merging parties agreed to divest all of Bolloré Logistics’ activities in French territories Guadeloupe, Martinique, Saint Martin and French Guiana, and a number of assets in France linked to these services.
The committee’s investigation found that the merger as is would have reduced competition in sea freight forwarding services in Martinique, Guadeloupe and French Guiana.
That same day, CMA CGM unveiled its fourth quarter earnings report that it generated $10.6 billion in revenue, down 37.4 percent year-over-year, on losses of roughly $90 million.
For the quarter, the company’s liner unit recorded a 6.8 percent annual increase in the number of containers it transported across its network to 5.5 million 20-foot equivalent units (TEUs). But the volume boost was accompanied by declining segment revenues of 46.6 percent to $6.6 billion in line with declining freight rates throughout 2023.
The ocean freight company’s financial performance mirrored competitors like Maersk and Hapag-Lloyd, both of which incurred net losses and saw steep double-digit revenue drops at 34 percent and 49 percent, respectively.
Although global trade for goods is expected to rebound from 2023 lows, the company said “2024 is likely to be shaped by sluggish global economic growth.”
“Volume growth should remain strong in the first half, supported by these base-line effects, but the second half looks more uncertain,” said CMA CGM in a statement. “In addition, new container shipping capacity is expected to come into service, pushing global supply in excess of forecasted demand, and leading to an anticipated adverse impact on freight rates.”
