Drewry has underscored the continued robustness of merger and acquisition (M&A) activity within the port and terminal sector, with three potential deals emerging as focal points of industry attention.
Recent times have witnessed a flurry of merger and acquisition (M&A) activities within the container terminal and logistics sector, setting the stage for a new wave of transformative developments.
Some of the most recent deals saw Hapag-Lloyd‘s acquisition of SM SAAM‘s terminal business and related logistics services as well as CMA CGM‘s purchase of Bollore Logistics, however, the appetite for further deals seems to remain high as disclosed in this morning’s webinar hosted by Drewry.
Whispers of three significant M&A deals are echoing through the industry corridors, Drewry‘s Senior Analyst for Ports and Terminals, Eirik Hooper, pointed out.
Among the speculated deals, PSA International is reportedly in discussions to acquire Brazil‘s Wilson Sons, the country‘s largest integrated ports, maritime and logistics operator.
The company‘s operations encompass container terminals at Rio Grande and Salvador, offshore support bases, logistics centers and ship agency services.
As explained by Hooper, the deal would provide PSA an operational foothold in the Brazilian ports market and align with its strategic aim of developing port adjacent maritime and logistic services.
“Our analysis is that we are not sure that the portfolio provides enough scale in the port side or enough synergy with PSA‘s existing operations to justify a premium valuation,” Hooper said.
Another potential deal is the sale of a 49% minority state in Malaysia’s MMC Port Holdings, the largest terminal operator in the country.
MMC operates container terminals in all the main Malaysian ports with a gross capacity of 23 million TEUs, and its portfolio also includes over 30 million tons of conventional and bulk cargo.
GIP, a leading infrastructure investor, is best known in the sector for its stakes in TIL and Peel Ports.
According to Hooper, GIP, recently acquired by BlackRock, is reportedly seeking financing for the deal, which will value the business at around $6.4 billion.
The third deal singled out by Drewry is the recently signed memorandum of understanding (MoU) between APM Terminals and Jawaharlal Nehru Port Authority (JNPA) for the development of a container terminal at Vadhavan Port, located about 150 km north of Mumbai.
The $9 billion greenfield project, which recently gained environmental approval from the Maharashtra state, is being developed to provide a long-term alternative option to JMP port under a JV agreement formed between JMPT and the Maharashtra Maritime Board.
Vadhavan has a natural draft of 20 meters which will open up the South Asian market to the ultra-large container vessels of 24,000 TEU and above, as explained by Hooper.
The project is envisaged as a public-private partnership with state funding of $5 billion for the core infrastructure, while the private sector investors are expected to invest the remaining $4 billion to develop container, multi-purpose, RORO, and liquid bulk facilities.
“For APMT, the opportunity is seen to be complementary to its existing terminals at JMP, which is operating at high levels of utilization, and also at Pipavav,” Hooper noted.
