Since the early-2000s, given the increasing profitability of the container port business, a number of financial investors were stimulated to both reach new market segments and enter the industry as investors. As additional financial resources have been increasingly requested from the sector to fuel greenfield mega-projects, M&A activity and the accelerated foreign expansion of international terminal operators (ITOs), financial investors increased have their effort by providing financial and technical support to both shipping lines and port companies. In this vein, financial operators and institutional investors soon emerged as key actors orchestrating big financial deals in the sector. They also played a significant role during shipping lines and port companies’ listing process or bond issuing.
These financial players understood that they could rely on resources accumulated and skills developed for operating in the container port business as investors. Their market entry was characterised by intensive M&A activity. In the 2000-2014 timeframe, the financial deals which they acted as buyers counted for over 82% of transaction value and over 65% in terms of acquired facilities. More recently, some carriers have been forced to reduce their exposure towards the container terminal business in order to generate additional fresh funds for supporting their – highly distressed – core business. For instance, a relevant share of the port branches of MSC (TIL) and CMA-CGM (Terminal Link) was recently sold to Global Infrastructure Partners (35%) and China Merchant Holdings International (49%), respectively.
PortEconomics members Francesco Parola and Giovanni Satta, along wit Gian Enzo Duci discuss the investments on container ports.