French shipping major CMA CGM has signed a binding agreement for the sale of a 90% equity interest in Global Gateway South terminal in Los Angeles (USA).

Under the agreement signed with EQT Infrastructure III and its partner P5 Infrastructure on July 1, the share will be acquired for an enterprise value of USD 875 million. CMA CGM will receive a cash consideration of USD 817 million to be paid at closing.

Following the completion of the transaction, CMA CGM will remain a minority shareholder holding 10% of the GGS terminal, which it acquired last year as part of Neptune Orient Lines (NOL).

“The terminal will remain an important part of our industry leading logistics network, and will have an opportunity to grow alongside CMA CGM. Throughout the sales process, EQT Infrastructure and P5 expertise have focused on growth in addition to a responsible, hands-on ownership approach, which we consider highly beneficial to our future partnership,” Farid T Salem, Executive Officer of CMA CGM, said.

CMA CGM added that the transaction terms also provide for the group to receive additional deferred, contingent cash consideration of which sequence and quantum will depend on GGS’ future operating and financial performance.

The shipping major and its subsidiaries entered into a long-term industrial partnership and utilization agreement with EQT Infrastructure and P5, allowing the group to remain a major user of the terminal with preferential conditions.

The disposal of GGS enables CMA CGM to complete the financial deleveraging plan communicated in December 2015 upon announcement of the NOL’s acquisition. The transaction is in line with CMA CGM’s strategy to focus on its shipping business while securing its operations through shared ownership of key terminals.

Closing of the transaction is subject to anti-trust and regulatory approvals, including clearance from the Committee on Foreign Investment in the United States (CFIUS), and is expected to occur by end of 2017.