📊 CMA CGM to buy Wincanton for $700M

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News

France's CMA CGM to buy UK logistics firm Wincanton for $700M French shipping group CMA CGM, through its unit CEVA Logistics, has agreed to buy UK logistics firm Wincanton in an all-cash deal.

• The deal is worth nearly £600M (about $719M).

• The 450 pence-per-share offer represents a premium of 52% to the Wincanton stock's closing price.

• The acquisition will expand CEVA's offering in contract logistics in the UK, utilizing Wincanton's expertise in partnering with grocers and retailers.

• Wincanton operates across a wide range of markets from food and consumer goods to fuel and defence, and operates from more than 170 sites.

• Wincanton's board intends to unanimously recommend that its shareholders vote in favor of the deal[2][5].

• Wincanton employs 20,300 people across 170 sites in Britain and Ireland and operates 8,500 vehicles.

• The acquisition will allow CMA CGM to add a new layer of expertise on warehousing management and grocery.

• The successful bid would end Wincanton's 23 years on the UK stock market. (link)

Rise in air freight demand attributed to Red Sea crisis Supply chain intelligence firm Xeneta has reported a sharp increase in air freight demand following the Red Sea crisis.

• The rise in demand is attributed to global shipping's anxiety around passage through the Suez Canal due to Houthi rebel attacks on Israeli ships after the invasion of Gaza.

• The fear that rebels would indiscriminately target global shipping is causing air freight volumes to soar.

• Approximately 12% of global trade, worth more than $1 trillion, passes through the Red Sea every year.

• The current spike in air freight is primarily in cargo volumes bound for Europe, as more companies avoid the longer Red Sea diversions around Africa’s Cape of Good Hope.

• Despite a US-led task force in the area aiming to intercept Houthi attacks, air cargo volumes from Vietnam to Europe spiked 62% in the week ending 14 January. (link)

Flexport raises $260M from Shopify Digital freight forwarder Flexport has raised $260 million from e-commerce provider Shopify.

• The funding was provided on an uncapped convertible note[1].

• This funding comes after Flexport acquired Shopify’s logistics arm last year, expanding the company into e-commerce fulfillment and last-mile delivery.

• As part of the deal, Shopify received a 13% equity stake in Flexport and a seat on the board.

• In 2022, Shopify invested an undisclosed amount in Flexport as part of a nearly $1B funding raise that valued Flexport at $8B.

• In February 2023, Flexport created a tool that helps sellers on the Shopify e-commerce platform manage and track inbound ocean shipments.

• In October, Flexport underwent a 20% drop in workforce as it attempted to circumvent financial losses, costing about 600 employees in total. (link)

Panama canal’s drought traffic dip could cost $700M A severe drought that began last year has forced authorities to reduce ship crossings by 36% in the Panama Canal, one of the world's most important trade routes.

• The new cuts announced on January 17, 2024, are expected to have a greater economic impact than previously anticipated.

• Panama Canal Administrator Ricaurte Vásquez estimates that the reduced water levels could cost between $500 million and $700 million in 2024, compared to previous estimates of $200 million.

• The drought, one of the most severe to ever hit the Central American nation, has caused a traffic jam of vessels, raised doubts about the canal's reliability for international shipping, and sparked concerns about its effect on global trade.

• Some companies had planned to reroute to the Red Sea to avoid delays at the Panama Canal, but this is no longer an option for most.

• Canal authorities attribute the drought to the El Niño weather phenomenon and climate change, and have warned that it is urgent for Panama to seek new water sources for both the canal’s operations and human consumption.

• The same lakes that fill the canal also provide water for more than 50% of the country.

• Despite the significant reduction in ship crossings, more efficient water management and a jump in rainfall in November have ensured that water levels are high enough for 24 ships to pass daily until the end of April, the start of the next rainy season. (link)

European battery maker ACC partners with Circulor to map supply chain, carbon emissions Automotive Cells Co (ACC) has partnered with UK startup Circulor to map its supply chain and measure the embedded carbon emissions of the raw materials used in its electric vehicle (EV) battery cells.

• ACC, a joint venture between Stellantis, TotalEnergies, and Mercedes-Benz Group, was launched in 2020 and has announced EV battery plants in France, Germany, and Italy, with a total investment of 7 billion euros ($7.6 billion).

• The French plant is expected to start mass production soon.

• Circulor uses blockchain technology to map supply chains for companies aiming for greener production.

• ACC's partnership with Circulor is aimed at ensuring that its supply chains operate sustainably and responsibly and that this value is passed on to its customers.

• European battery makers are under pressure to differentiate themselves from Chinese rivals, by demonstrating greener products with lower CO2 emissions and more recycled content. (link)

Amazon expanding $1B supply chain fund scope into transportation Amazon is expanding the investment categories of its $1B program for logistics and fulfillment technology, known as the Amazon Industrial Innovation Fund.

• The fund, which was launched in April 2022, will now also invest in transportation, including autonomous vehicles and last-mile technologies.

• The fund's purpose is to spur and support innovative startups focused on warehouse automation and supply chain innovation, including artificial intelligence (AI) and machine learning (ML).

• According to Franziska Bossart, director of the Industrial Innovation Fund at Amazon, technology will continue to play a significant and ever-increasing role in fulfillment centers, and there will be more technology adoption throughout Amazon's network, including in middle and last-mile delivery.

• The fund has made close to a dozen investments in promising technologies, including Rightbot, which is developing a system to automate the unloading of containers, and Instock, which has designed a robotic storage and retrieval system that offers efficient inventory management. (link)

TPG Announces $228 Million Strategic Growth Investment in Sayari TPG Growth, the middle market and growth equity platform of TPG, has made a strategic majority investment of up to $228M in Sayari.

• Sayari is a counterparty and supply chain risk intelligence provider trusted by government agencies, multinational corporations, and financial institutions.

• Sayari's founders, employees, and existing investors will retain a significant stake in the company.

• Founded in 2015, Sayari integrates global corporate and supply chain data to surface risk insights for investigations, analytics, and supply chain risk management.

• Sayari's platform is trusted by users from across global regulators, law enforcement, and national security agencies, as well as over 100 of the world's largest public and private companies.

• The new backing from TPG is expected to accelerate Sayari’s global expansion and support the launch of new products.

• TPG Growth has previously held stakes in supply chain software firm Llamasoft, logistics visibility platform vendor project44, and third-party logistics provider Transplace.

• TPG and Sayari aim to develop groundbreaking solutions to address the increasingly complex set of risks companies face and to promote safer global commerce. (link)

Other headlines 

Joint freight deal between Air France-KLM and CMA CGM collapses due to Dutch and US regulations.

Forward Air amends agreement to acquire Omni Logistics. The two companies have reached an agreement, amending their merger terms to settle litigation.

Cummins to spend $580M on North Carolina engine plant as part of the company’s decarbonization push.

Flying Tiger Copenhagen partners with Maersk to ship its entire ocean freight with Maersk’s ECO Delivery solution from 2024 onwards.

Nikola advances hydrogen refueling infrastructure buildout and expects 7 fueling stations online by the end of Q2.

Court approves sale of 23 Yellow leased terminals to six bidders for an aggregate price of $82.89M.

Sphera acquires SupplyShift to enable businesses improve their overall ESG performance.