The sale of up to 49% of the capital of Rail Logistics Europe (RLE), the structure grouping SNCF’s rail freight subsidiaries, has taken a step forward with France’s state railway appointing two investment banks to manage the process. Lazard and Indosuez Corporate Advisory have sent a presentation document to potential candidates which values the stake at around 800 million euros, according to a report in the French media.
They include investment funds, transport and logistics companies, and major European ocean shipping lines – among them France’s CMA CGM and also MSC and Maersk. The aim is to complete the operation in 2027. Contacted by RailFreight.com, a spokesperson for RLE declined to comment on the report which highlighted the particular interest of CMA CGM in the stake.
CMA CGM in the frame ?
The Marseilles-based group’s ongoing strategy is to develop a multi-modal freight transport offering includes rail. Earlier this year, it completed the acquisition of UK rail freight operator Freightliner to boost its intermodal services, taking over 2,000 wagons, 10 terminals and one of the largest fleets of electric locomotives in the UK.
In May last year, CMA CGM increased its weekly rail services between Marseille and Lyon, in southeast France, to five departures in each direction The increased frequency is expected to boost international trade to and from Lyon, where the group is investing significantly. CMA CGM was approached for comment.
Another potential candidate for a stake in RLE is one of CMA CGM’s main rivals, Switzerland-based MSC via its subsidiaries Medlog and Medway. Among the most recent developments are a wagon manufacturing plant in Trieste, the launch of a Portugal-Spain rail highway service for semi-trailers and the expansion in French and Austrian markets. Last week, Medway took delivery of a batch of four locomotives in a ceremony held at a railway station in Lyon.
SNCF set on keeping majority control
Wholly-owned by SNCF, RLE comprises six branches, Captrain and Hexafret (rail freight transport), Naviland Cargo (maritime containers), VIIA (rolling highways), Technis (rolling stock maintenance) and Forwardis (freight forwarding), appear at first glance to be less relevant.
SNCF and the French State are thought to favour a block sale arrangement of the RLE stake which would not allow bidders to exclude those branches that they had little or no interest in. In the case of CMA CGM, this could prove an obstacle as Forwardis and Technis would not appear to be of strategic value to the group.
Moreover, while SNCF’s intention to retain at least 51% of RLE’s capital – thereby offering the trade unions a guarantee that the public utility will continue to have majority control when it comes to decision-making – may suit an investment fund, it is far less appealing to an industry player whose aim is to have a free hand to rapidly implement operational synergies, the report noted. In any case, the strong trade union culture within the SNCF group would be a key factor to consider for any potential investor in RLE, French or foreign.