MSC buys 67% of Log-in and enters the cabotage market

The sale of 67% of Log-in to Mediterranean Shipping Company (MSC), completed on January 13th, should boost operations at the cabotage shipping company.

With the entry of the new shareholder, which is a global giant in long-haul shipping, several joint operations opportunities are opening up, says Marcio Arany, president of Log-In.

Log-in was the only independent cargo transport firm operating on the Brazilian coast, meaning it was not backed by a huge worldwide shipping company. Aliança, owned by the Maersk company, and Mercosul Line, operated by CMA CGM, are the other two largest operators.

MSC (via its subsidiary SAS Shipping) will own 67% of the company’s capital following the public auction on the 13th. The shares were sold for R$25 each. As a result, the total amount disbursed was R$1.75 billion (US$316 million).

Despite the high potential for integration between the two companies, Log-in’s president emphasizes that this is not a merger; instead, the Brazilian firm will continue to pursue results and establish goals regardless of its new parent company.

“MSC has been working with Log-in for years as a customer. Now there will be many more possibilities. However, at least in the short term, the relationship we will pursue will not be like that of the Aliança and Maersk, or the Mercosul Line with CMA. These shipowners are aiming for the global optimum. We’re going to keep looking for what’s great for Log-in,” adds Arany.

On that note, Arany exemplified that “as a result of the Argentine crisis, the layover in Buenos Aires has shrunk, and ships are arriving with less cargo. Taking the MSC brand out of the country, on the other hand, would be bad for the company which can now use Log-in as a feeder service”.

The acquisition does not include capital investment. “Log-in does not need it and will not receive any form of resource injection unless MSC has a big project that demands it”.

Log-in has been implementing a strategic growth plan in tandem with the changes in ownership control. The company announced the acquisition of Tecmar, a road company, in December. The R$ 102.7 million worth transaction is still awaiting approval from the Economic Defense Administrative Council (Cade).

Furthermore, Log-in is investing to increase its handling capacity by 60% by adding three more ships to its current fleet of six vessels. The goal is to improve capacity at the country’s northern routes in particular.

The first vessel was purchased in Australia in February 2021. However, it has been leased for long-haul routes and has not yet been incorporated into the company’s cabotage fleet.

The corporation opted to hold off until the new cabotage law, BR do Mar, was approved, allowing for more flexibility in the usage of foreign vessels along the national coast. Furthermore, there was no increase in demand in the country to support the expansion.

Source: Valor Econômico

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https://valor.globo.com/empresas/noticia/2022/01/14/msc-compra-67-da-log-in-e-entra-em-cabotagem.ghtml

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