The European Commission (EC) has approved the proposed acquisition of compatriot transport and logistics firm Bolloré Logistics by French shipping major CMA CGM.
The approval is conditional upon full compliance with the commitments offered by the parties, according to EC.
As explained, 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.
In particular, the commission found that the transaction would have created important vertical links between:
The European Commission found that CMA CGM could have the ability and incentive to favor Bolloré Logistics at the expense of rival freight forwarders, in particular because of CMA CGM’s very high market shares on these overseas routes and the competitive structures in these territories.
To address the commission’s competition concerns, the parties offered to divest all of Bolloré Logistics’ activities in Guadeloupe, Martinique, Saint Martin, and French Guiana; and a number of assets in metropolitan France linked to these activities.
These commitments are said to 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 European Commission concluded.
In the course of its investigation, the commission worked in cooperation with the competition authorities of French Polynesia and New Caledonia.
“Competitive maritime transport markets are crucial to strengthen territorial cohesion within the European Union, ensuring that remote and insular territories remain well connected and can develop economically. The remedies offered by the parties will ensure that the local sea freight forwarding markets remain competitive and that, ultimately, local customers do not end up paying higher prices for products imported from mainland Europe,” Margrethe Vestager , Executive Vice-President in charge of competition policy, commented.
Last year, CMA CGM committed to purchasing Bolloré Group’s transport and logistics operations – Bolloré Logistics, a deal that will make it one of the world’s top five providers of transport and logistics services.