CMA CGM withdraws bid for SNCF rail freight stake

CMA CGM withdraws bid for SNCF rail freight stake FRANCE: CMA CGM has pulled out of the race for a 49% minority stake in Rail Logistics Europe, which groups French state railway SNCF’s rail freight interests, sources from the shipping company have confirmed to Railway Gazette International‘s sister title, RailFreight.com. The shipping group’s Chairman & CEO Rodolphe Saadé had told French media outlets in recent weeks that he was only interested in a small proportion of RLE’s activities, most likely those involving intermodal and container traffic. Such a position does not correspond with SNCF’s strategy which focuses on finding a shareholder ready to take a stake which encompasses the full range of RLE’s activities. ‘CMA CGM pulling out doesn’t surprise me. First of all, there appears to be personality clash between the two protagonists’, SNCF chairman Jean Castex and Rodolphe Saadé. ‘It seems that they have met on three occasions and that each time things went badly. Two strong egos, no doubt’, one insider told RailFreight.com. ‘Also, I think that SNCF has failed to realise that even if a multi-hundred million investment is a relatively minor sum for CMA CGM, it nevertheless entitles them to having a say in the governance of RLE – guarantees they didn’t get as Castex isn’t one to share power.’ Eyes on Naviland The source noted that Saadé’s interest in RLE focused largely on Naviland Cargo (maritime containers), especially as the French group’s main ocean shipping rival MSC, is quickly building up its presence in this segment through its rail operating subsidiary, Medway. However, Naviland was not the only interest CMA CGM had in RLE, the latter also having considerable expertise in finished vehicle transport across Europe, which would have complemented that of CMA CGM’s logistics arm Ceva, the source added. Selling 49% of RLE’s capital was one of the conditions laid down last year in an agreement between the European Commission and the French state on the break-up of Fret SNCF. The restructuring of the Fret SNCF business followed accusations of misuse of state aid funding. CMA CGM’s withdrawal means three candidates are left for the stake in RLE: Czech entrepreneur Daniel Kretinsky, who own central European rail freight operator EP Cargo; German logistics group Rhenus and an unidentified private equity fund. France’s biggest rail freight player, RLE posted revenue for the first half of the year of €948m, a year-on-year increase of 3.9%. EBITDA increased to €118m versus €110m a year earlier, the margin improving from 12% to 12.5%. - This article originally appeared in Railway Gazette International’s sister publication RailFreight.com. Subscribe to gain access to all news Already have a subscription? Log in. Choose your subscription Considering a corporate subscription? Contact us to find out more.