Amsterdam, 24 september 2024 — Nestled between one of the Americas largest cities, São Paulo, and the Atlantic Ocean, the Port of Santos is a sprawling port that continues to grow. It is the second busiest container port in Latin America after Panama’s Port of Colón and acts as the beating heart of Brazil’s economy.
One of the 50 busiest ports worldwide, it is key to not just moving consumer goods into one of the world’s largest economies but crucial products out of Brazil, such as soybeans, coffee, metals, and petroleum products.
Through periods of rapid development and political upheaval, the port has endured.
Brazil’s Opportunity investment group reached an understanding with French giants CMA CGM for the sale of its stake in the Brazilian Port Terminal of Santos (STBP3), it was announced late Sunday.
Opportunity, founded by entrepreneurs Daniel Dantas, Veronica Dantas, and Dorio Ferman in 1994, had purchased its 48% stake back in 1997 and decided to capitalize on CMA CGM’s global logistics expansion policies in exchange for R$ 15.3 a share, which at the end of the day amounted to R$ 13.2 billion (around US$ 2.4 billion), a 20.4% premium on Friday’s closing price of R$12.71.
The transaction was also said to have a 12x EBITDA (earnigs before interest, taxes, depreciation, and amortization). This index is used to measure the investment’s projected profitability. Santos Brasil operates Tecon Santos, the largest container terminal in Brazil and one of the largest in Latin America, and currently accounts for around 17% of container handling nationwide.
The third largest container operator in the world, CMA CGM is a global logistics and shipping group with a presence in 160 countries, owning 620 ships and operating in 420 ports. The French company intends to take full control of the port by buying out the minority shareholders at the same price per share as at the close of the operation, it was also explained.
According to business sources, Rothschild & Co. advised the sellers while former Vivendi CEO
Jean-Marie Messier
Jean-Marie Messier acted as counselor for CMA.
CMA CGM was already a client of Santos Brasil’s terminals. Santos Brasil closed Friday worth R$11 billion, with the share trading at R$12.71. Sunday’s deal is expected to be fully closed by the year’s end, pending the usual regulatory approvals. Shareholders will also receive at least R$ 0.5 per share until the end of the year, and a previously approved capital reduction of R$1.85 per share on Nov. 6. Hence, the final value of the purchase hinges on these adjustments until the closing date of the operation, as provided for in the contract.
In addition, the price per share will be paid in full in cash at the closing of the operation, which also depends on approvals from the Administrative Council for Economic Defense (Cade), the National Waterway Transport Agency (Antaq) and the competent port authorities.
“With its global operations, CMA CGM will bring a potential for generating value that complements Santos Brasil’s momentum. CMA CGM assures us of its confidence in the country and its commitment to continuing the path of success that Opportunity and Santos Brasil have charted together. At the end of another investment cycle, Opportunity remains confident in the opportunities in Brazil, especially in the infrastructure sector, and will continue with its goal of growing and contributing to the country’s development,” said Opportunity in a statement.
Since its involvement dating back to 1997, Opportunity has invested over R$ 9 billion (US$ 1.61 billion) to increase its logistics and port capacity, ”of which R$5.9 billion (US$ 1.06) was invested in the modernization and expansion of Tecon Santos, expanding the terminal area from 366,000 m² in 1997 to 620,000 m² today, a quay that went from 510 meters to 1,510 meters and a capacity of 200,000 TEUs in 1997 to more than 2 million TEUs,” the document also noted.
A TEU is a measure of volume in units of 20-foot long containers. In other words, one 20-foot container is tantamount to a TEU. On average, large container ships can carry around 18,000 TEUs.
