PSA acquires 50% stake in Indian logistics hub from CMA CGM

December 03, 2019: PSA India Intermodal Pte Ltd, a unit of Singapore-based port operator PSA International Pte Ltd, has acquired a 50 percent stake for $93 million in an Indian logistics hub from French shipping group CMA CGM.

“PSA Intermodal Pte Ltd has signed an agreement to acquire CMA CGM’s stake in Ameya Logistics Pvt Ltd,” a spokesperson for PSA India told BusinessLine. The investment is subject to the fulfillment of conditions precedent.

A CMA CGM official said it was selling the 50 percent stake it held in the Indian logistics hub for $93 million (of which $85 million is at closing and $8 million of earn-out) and the deal is expected to be closed in the first quarter of 2020.

Marseille-based CMA CGM, the world’s fourth largest container shipping company held the 50 percent stake in Ameya Logistics Pvt Ltd, the entity that runs a container freight station (CFS) near Jawaharlal Nehru Port Trust (JNPT), India's busiest container gateway.

Ameya Logistics, in turn, held a 51 percent stake in CMA CGM Logistics Park Dadri, located in Greater Noida, Uttar Pradesh with Container Corporation of India Limited (Concor) holding the balance stake.

Ameya Logistics also held a 55 percent stake in Honeycomb Logistics Pvt Ltd, which runs a CFS at Mundra in Gujarat.

The purchase of the 50 percent stake in Ameya Logistics will help PSA get stakes in the other two facilities as well. This is part of a plan by the container terminal operator to diversify business and garner more revenue from inland logistics.

PSA International, the world’s biggest container port operator by volumes, is fully-owned by Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore.

In 2018, during a visit to India to open PSA’s biggest terminal in the country at JNPT, Tan Chong Meng, Group CEO, PSA International, has mentioned that the operator was scouting India’s vast cargo hinterland for potential acquisitions.

“We have grown our presence in India organically. If there is a good opportunity, we would add that on to the network we already have. Because, bear in mind that before BMCT, our market share in India was 13-14 percent, with BMCT we have the potential, within a few years, to get to maybe 20 percent or even above that and that is a meaningful percentage. With today’s technology, presence in the hinterland side in the key hubs called ICD’s may also be meaningful so that we can serve customers at more points, all the way nearer to destinations,” he said.

“It will be interesting to look at the hinterland. I would love to have a good project. The train will be the key driver that says how fast we grow. With India as a consuming power-house, inland logistics is not a bad idea,” Meng added.