Four candidates are said to be in the running to acquire a minority stake in Rail Logistics Europe (RLE), the holding company overseeing Groupe SNCF’s rail freight operations. French shipping line CMA CGM and Daniel Kretinsky, a Czech entrepreneur who heads a group spanning energy and retailing, are reportedly included.
Kretinsky also owns the parent company of pan-European parcel operator GLS and UK postal service Royal Mail. The sale for up to 49% of RLE’s capital was one of the conditions laid down in an agreement between the European Commission and the French state on the discontinuation of Fret SNCF which was suspected of receiving billions of euros in illegal aid.
SNCF, bidders ‘keeping mum’
Asked whether Kretinsky and CMA CGM were candidates to purchase up to 49% of RLE’s capital, a spokesperson for SNCF told RailFreight.com: “We have no comment to make on this highly regulated process.” Neither would the spokesperson comment on the timeframe established for the tender process nor disclose when the successful bid would be announced.
Contacted by RailFreight.com, a spokesperson for the Kretinsky Group said: “As a matter of policy, we do not comment on speculation regarding our acquisition plans.” CMA CGM was also approached.
An industry source, who preferred not to be identified, said it was his understanding that there were currently three or four candidates to acquire a stake in RLE.
“In addition to CMA CGM and Daniel Kretinsky, Rhenus (a German logistics group) is also in the running while it appears that at the last minute a private equity fund has joined the race. Rhenus already has a small presence in France but more importantly, its shareholder, the Rethmann family, acquired a majority stake in Transdev last year – a French group operating transit systems including light rail and heavy rail.
CMA CGM the ‘ideal buyer’
Asked whether the winning bidder for the stake would have their hands tied given that SNCF would retain majority control, the source replied: “All of the candidates are aware that they cannot exceed a 49% stake. From a social perspective (and with political implications), going beyond this percentage would be unacceptable. Hexafret, for example, has 500 out of its 4,000 employees covered by railway worker status.”
The source said the French government’s “ideal buyer is, of course, CMA CGM. Rhenus is an option to a certain extent, but Kretinsky, I’m sceptical about. I find it hard to imagine the French state selling part of its assets to him. Let’s not forget, for example, that RLE handles at least 80% of the French army’s military transport operations.”
Marseille-based CMA CGM’s ongoing strategy is to develop a multi-modal freight transport offering that includes rail. Earlier this year, it completed the acquisition of UK 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, it 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.
Rail Logistics Europe
RLE is the largest rail freight player in France and its subsidiaries include Hexafret, Captrain France, VIIA, Naviland Cargo, Forwardis and Technis. Earlier this year, France’s state railway appointed two investment banks to manage the process. Lazard and Indosuez Corporate Advisory sent a presentation document to potential candidates which valued the stake at around 800 million euros.