CMA CGM cleared to acquire compatriot freight forwarder Bolloré Logistics
Shipping major, CMA CGM, has received the approval of the European Commission for its proposed acquisition of compatriot freight forwarder Bolloré Logistics. However, during the investigation the commission found that the merger would have reduced competition in certain regions, thus requiring CMA CGM to implement certain remedies before the acquisition could be completed.
It is worth reminding that last year, CMA CGM said that its acquisition of the compatriot freight forwarder, worth €5 billion ($5.5 billion), would significantly strengthen its logistics business and make it a top-five player in global logistics.
Fear of unfair competition
The Commission was notified of the acquisition in January this year, and its investigation showed that the merger, as initially notified, would have reduced competition in the markets for the provision of sea freight forwarding services in Martinique, Guadeloupe, and French Guiana.
In particular, the Commission found that the transaction would have created important vertical links between CMA CGM’s upstream container lining shipping activities on routes connecting Europe with Martinique, Guadeloupe, and French Guiana and Bolloré Logistics’ downstream sea freight forwarding activities in those territories.
Read also: Is CMA CGM acquisition of Bolloré Logistics a threat to freight forwarders?
The Commission found that CMA CGM could have the ability and incentive to favour Bolloré Logistics at the expense of rival freight forwarders, particularly given CMA CGM’s very high market shares on these overseas routes and the competitive structures in these territories.
The remedy
To address the Commission’s competition concerns, the parties offered to divest all of Bolloré Logistics’ activities in Guadeloupe, Martinique, Saint Martin, and French Guiana, and several assets in metropolitan France linked to these activities.
These commitments fully address the competition concerns identified by the Commission, by removing the vertical link between CMA CGM’s container liner shipping activities and Bolloré Logistics’ sea freight forwarding and transport activities in the concerned territories.
Following the positive feedback received in the commitments’ market test context, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns.
