CMA CGM is in Bidding War for UK Logistics Company Wincanton

CMA CGM is entering a bidding war as the group looks to expand its logistics operations with the acquisition of UK-based Wincanton. Through its CEVA Logistics subsidiary, the group last month agreed to the acquisition even before it completed the larger acquisition of Bollore Group’s logistics operations. 

The Financial Times broke the news today of a competing bid for Wincanton and the company confirmed it had been approached by an unnamed company. Later in a London Stock Exchange announcement, they identified the approach coming from U.S-based GXO Logistics, which describes itself as the “world’s largest pure-play contract logistics provider.” The company reports operations in 27 countries, more than 970 facilities, and approximately 200 million square feet of space, including a 2022 acquisition of Clipper Logistics in the UK. GXO last week reported $9.8 billion in revenues and $229 million in net income in 2023.

Wincanton said under UK securities law it had provided access to due diligence materials, reporting that GXO “has indicated it is considering making a proposal for a cash offer.” They cautioned however that no formal proposal has yet been received. The announcement triggers a time clock under UK securities law which will require GXO to either firm up its proposal or announce it is abandoning the approach.

CEVA responded by announcing that it had raised its offer to what it called its “final price” while citing that it had the right to respond to competing proposals. The group had initially agreed to a deal valued at nearly $720 million. They increased their all-cash offer by a further nearly seven percent to a value of $767 million.

Wincanton is nearly 100 years old and operates at more than 170 sites. Last year, the company had revenues of more than $1.8 billion and EBITDA of nearly $154 million. It is considered to be a highly attractive operation with more than 8,500 vehicles and services sectors including food, fuel, industrial equipment, and building materials. Many of the UK’s leading retailers are customers of Wincanton.

CEVA highlights that it has already received a positive indication from the UK’s Competition and Markets Authority which is said not to be requesting additional information and did not open an investigation into the proposed acquisition. The Irish merger control authority is reported to have approved the deal.

If CEVA is successful it would double the size of the company’s UK operations. Worldwide, CEVA has $15 billion in annual revenue. 

Last Friday, the European Union’s merger authority reported it had completed the review of the proposed acquisition of the logistics operations from Bollore. With an agreement to divest some small pieces of the group, the deal was approved.

CMA CGM highlighted the importance of its strategy to expand the logistics operations in its year-end financial report also issued last Friday. They cited the uncertainties and near-term challenges for the shipping industry and the importance of balancing it with the logistics business.