CEVA Logistics acquires CMA CGM Log in new strategic plan

While CEVA Logistics will continue to handle airfreight, the global company made a strong commitment to the seafreight sector in its revised plan for 2021, which details its new strategy. The new plan followed the release of its third quarter 2018 results two weeks ago, which showed drastic year-over-year decreases in the company’s operating income.

Central to the plan is the “intensified business relationship” with France-based shipping company CMA CGM, in which CEVA will purchase 100 percent of the freight management segment of the company, known as CMA CGM Log, for US$105 million. CEVA will remain an independent company following completion of the public tender offer, which is said to be completed in the second quarter of 2019.

CEVA says the integration of CMA CGM Log will strengthen CEVA’s foothold in seafreight management, full-container load (FCL) and less-than-container-load LCL traffic, customs clearance, carrier haulage and airfreight forwarding.

It will also reduce internal operational cost redundancies, strengthen its focus on cold chain and e-commerce logistics, and open it up to more opportunities in new geographical areas, including Asia, the Middle East and Africa.

CEVA has also appointed a new chief operating officer and deputy CEO, Nicolas Sartini, who was previously CEO of shipping company APL Limited, a subsidiary of CMA CGM. Sartini will step into his new role on Jan. 1.

Looking forward, CEVA said it expects “an incremental $100 million of adjusted EBITDA by 2021, compared to the objective set” at CEVA’s initial public offering, which was somewhere in the range of $470 to $490 million.

Xavier Urbain, CEO of CEVA, said the company’s new goals will be achieved by “a combination of our commercial and sales focus, cross selling with CMA CGM customers, our own productivity actions, the integrations of CMA CGM Log within CEVA and sharing resources with CMA CGM in the field of procurement and administrative functions.”