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Business Last Updated: Oct 22, 2021 - 3:47:26 PM


Bolloré: Is a $6bn sell-off on the cards for historic port operator?
By Olivier Caslin, Africa Report, 20 October 2021
Oct 20, 2021 - 10:59:12 AM

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The Bolloré Group has been present in Africa for over 30 years

The possible withdrawal of Bolloré from its port activities on the continent, which has been on the table since 2020, bears witness to the profound reconfiguration of the sector underway, in a context of post-pandemic recovery of traffic.

Will a page be turned for Bolloré in Africa? On 15 October Le Monde reported Vincent Bolloré’s group has mandated Morgan Stanley to identify potential buyers for its transport and logistics activities in Africa, grouped under Bolloré Transport & Logistics (BTL) since 2018.

When contacted, Bolloré group, which is present in 42 African ports and operates 16 container terminals on the continent, did not confirm its desire to sell. In a one-sentence statement, it said it would not comment on “press rumours concerning its transport and logistics activities”.

With the Covid-19 pandemic shut down now a distant memory, the shipping industry is now at a turning point in its development. On the verge of a genuine reorganisation, the sector is now overheating, driven by strong demand and soaring freight costs.

 

CMA CGM, Maersk, Cosco, potential buyers

In this context, there is no shortage of candidates for a potential takeover, especially among shipowners, who have been accumulating cash in recent months and could take advantage of the operation to strengthen the integration of their activities, from shipping to handling.

The French carrier CMA-CGM and the Danish carrier Maersk would study the dossier, according to Le Monde.

If a port operator like DP World, always on the lookout for opportunities to expand its development on the continent in recent years, would likely be interested, another shipping company is also following the dossier very closely.

The Chinese giant Cosco Shipping, owner of Piraeus port in Greece, does not manage any terminals in Africa, unlike its main competitors, MSC, Maersk and CMA-CGM. It also already works in partnership with Bolloré in several countries on the continent.

This is not the first time that the scenario of a withdrawal of Bolloré from the continent is evoked. The echoes of recent months, which are emerging today, are added to those reported on in mid-2020..

At the time, rumours circulated that the French group could sell its African ports in order to build up a war chest to develop other activities, particularly in the media.
Separation of key activities

There had already been talk of a possible takeover by a Chinese group. And in the past, the group had not hesitated to sell off flagship activities to change tack: in the 2000s, it withdrew from tobacco, its legacy business, and sold the ship operator Delmas-Vieljeux to CMA-CGM.

Three other elements are relevant.

First of all, while Vincent Bolloré announced his retirement on the date of the bicentenary of the group’s creation, in February 2022, his son Cyrille, the designated successor, has still not made a name for himself, three years after taking the reins of the group’s transport and logistics activities.

Second, the continent has recently been synonymous with trouble for the Breton businessman, who was indicted at the end of April in France for “corruption of foreign agents holding public authority” in the context of port concessions obtained in Lomé and Conakry.

This leads some observers say that Vincent Bolloré — whose guilty plea in the Togolese case was knocked by by a French judge — could want to disengage from a continent where it will be increasingly difficult for his group to maintain its position. Bolloré Terminals Ltd (BTL) was evicted from the Douala terminal in 2020 for example, something it is fighting.

Finally, the group’s recent efforts to make its terminals “greener” could be interpreted as a way of “making the bride more beautiful” before a possible sale. Its Ghanaian subsidiary has obtained the “Green Terminal” label and could become the model for eco-responsible terminals to be developed on the continent

If this withdrawal were to be confirmed, it would mark a turning point, putting an end to more than thirty years of the group’s presence on the continent.
Valuation at 6 billion euros

Nothing is definitively decided and it is doubtful that Bolloré, a group proud of its continental roots, is ready to give up its African showcase built over several decades.

Strategically and financially, many other questions remain unanswered. The main one concerns the exact scope of the activities that the group would like to divest from. Since the 2018 reorganisation, BTL has been present on all continents and has expanded its territory beyond port terminals to become a multimodal operator.

Is it a question of separating itself from the historical port activities, grouped together in the past under the label of Bolloré Africa Logistics (BAL), and retaining – even in Africa – a leading logistics network on a large part of the continent? Or to extricate itself from a transport sector which, after having long made the group rich and famous, is now forcing it to invest heavily to keep up with the current trend towards consolidation?

If the valuation of 5 to 6 billion euros, mentioned in mid-2020 by those in the know, is still valid, this would correspond more or less to the current price per kilometre of quay and to the sale of the fifteen or so container terminals that the group has in Africa.

Whatever the outcome, it prefigures a profound reconfiguration of the port and logistics sector in Africa, in the context of a post-pandemic traffic boom. Example: the Dubai based DP World has just announced with the UK public development fund, CDC Group, the creation of a 2 billion dollar platform to finance port projects on the continent.


Source:Ocnus.net 2021

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