The European Commission (EU) has approved, under the EU Merger Regulation, the proposed acquisition of Bolloré Logistics SE (Bolloré Logistics) by CMA CGM S.A. (CMA CGM).
The approval — which brings the shipping giant closer to growing its multimodal business — nonetheless, is conditional upon full compliance with the commitments offered by the parties.
In a press release confirming its approval of the acquisition, the EU raised concerns about reduced competition resulting from the takeover.
"The Commission's investigation showed that the merger, as initially notified, would have reduced competition in the markets for the provision of sea freight forwarding services in Martinique, Guadeloupe, and French Guiana," the announcement said.
In particular, the Commission noted that it found that the transaction would have created important vertical links between CMA CGM's upstream container lining shipping activities on routes connecting Europe with Martinique, Guadeloupe, and French Guiana; and Bolloré Logistics' downstream sea freight forwarding activities in those territories.
"The Commission found that CMA CGM could have the ability and incentive to favour Bolloré Logistics at the expense of rival freight forwarders, in particular in view of CMA CGM's very high market shares on these overseas routes and the competitive structures in these territories," the Commission, added.
To address these competition concerns, the Commission noted that Bolloré and CMA CGM offered to divest all of Bolloré Logistics' activities in Guadeloupe, Martinique, Saint Martin, and French Guiana.
The parties also offered to divest a number of assets in metropolitan France linked to these activities.
The Commission said these commitments fully address the competition concerns identified by the Commission by removing the vertical link between CMA CGM's container liner shipping activities and Bolloré Logistics' sea freight transport activities in the concerned territories.
"Following the positive feedback received in the context of the commitments' market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns," the statement added.
The Commission said in the course of its investigation, it worked in cooperation with the competition authorities of French Polynesia and New Caledonia.
"The decision is conditional upon full compliance with the commitments," the agency said, adding that under the supervision of the Commission, an independent trustee will monitor their implementation.
CMA CGM and Bolloré Logistics are both international transport and logistics companies. CMA CGM provides container liner shipping and port terminal services, while Bolloré Logistics offers freight forwarding and contract logistics services.
The Commission said the transaction was notified to the Commission on January 5, 2024.
The French shipping and logistics company entered into exclusive negotiations with the Bolloré Group in April last year to acquire Bolloré Logistics' transportation and logistics operations in a deal estimated to be worth approximately €4.6 billion (US$4.99 billion).