CMA - Sarria Daily Comments 03/11/2021

c looking to repurchase the Fenix terminal, which it sold 90% of to EQT back in July 2017 for US$817m. CMA is buying back an asset it knows , it uses (CMA is the largest single customer) and will likely alleviate bottlenecks for your customers in a major market, makes sense when you have a lot of cash. CMA will pay USD2.1bn for the remainder of the asset, easily manageable given we expect the company to have had cash of over $5bn on September 30.

-Fenix is part of the Port of Los Angles and is valued at US$2.3bn (including debt). Is this too much to pay? As a freight operator, CMA CGM will look at this transaction on an integrated basis. CMA has seen global handling costs rise 24% from US$289 per box in H12019 to US$358 in H12021. With the issue at West Coast US ports being particularly acute. The asset was originally disposed of when the company needed to de-lever, that isn’t today’s problem. Bringing it back now makes strategic sense even if the price is likely to be full.