News / CMA CGM buys major Los Angeles container terminal operator for $2.3bn

APL Merlion calls Fenix Terminal Port of Los Angeles

CMA CGM is set to massively expand its footprint in the Los Angeles-Long Beach port complex, agreeing to acquire LA terminal operator Fenix Marine Services.

The carrier group already holds a 10% stake in the box facility and will become the sole owner when it buys the 90% owned by private equity fund EQT Infrastructure III for $2.3bn.

According to CMA CGM, the terminal is the third-largest in the LA-LB gateway complex, with an annual handling capacity of around 2.5m teu and a concession to operate until 2034.

“The swift recovery of the global economy has demonstrated the importance of ports and logistics infrastructure,” said Rodolphe Saadé, chairman and CEO of CMA CGM Group.

“In order to manage efficiently our port operations on the west coast of the United States, we have decided to acquire Fenix Marine Services.

“Fenix Marine Services is one of the largest terminals in this country and one of its most strategic gateways. It is a key industrial facility which will significantly strengthen our position and support our rapid growth in this market,” he added.

According to Loadstar Premium, the French carrier “currently has plenty of financial flexibility to fund it via existing cash flow streams and cash on the balance sheet”.

(On 1 October, Loadstar Premium wrote: “CMA CGM – it’s your turn to deal now, darling“.)

According to the eeSea Liner database, the terminal currently services two transpacific Ocean Alliance services – PSW1 and PWS3, which each deploy four vessels of 13,000 teu to 14,000 teu – three CMA CGM/APL express transpacific services and SM Line’s CPX service.

The terminal has four berths of around 350 metres, is equipped with 16 cranes and has eight intermodal rail tracks.

CMA CGM added that once the deal was complete, it would expand both the container yard and its rail capacity, as well as construct a new berth. It also added that the group’s LNG-fuelled vessels were expected to start calling at the terminal early next year.

Fenix recently signed a $50m order for four new ship-to-shore cranes.

Meanwhile, the Fenix staff and management, headed by veteran terminal executive Sean Pierce, are expected to remain with the company.

“CMA CGM is looking forward to working as terminal operator with FMS’s experienced teams and to welcoming them into the broader family of CMA CGM terminals,” it said. “Our vision was always to deliver operational excellence,” said Mr Pierce. “All employees at Fenix Marine Services, whether on the front line in the port of Los Angeles or at our back-office in Arizona, have been critical in delivering that vision.

“This transaction is a testament to the strength and fortitude of the team. We thank our partners at EQT for their unique, active support of the company throughout this journey,” he added.

Alex Darden, partner and head of EQT Infrastructure’s US advisory team, said: “It has been a pleasure to partner with Sean and the management team, each of whom has done a fantastic job implementing our full potential plan, including an ambitious digitalisation programme and an industry-leading sustainability agenda.”

EQT acquired Fenix, then known as Eagle Marine Services, in 2017.

CMA CGM also holds a 10% in Long Beach’s Pacific Container Terminal, with Cosco holding 46% and SSA Marine 44%.