French shipping group CMA CGM has committed to buy the logistics operations of family-run conglomerate Bollore for an enterprise value of 5 billion euros ($5.5 billion), the two companies said on Monday.

CMA CGM granted the Bollore group an option to sell it the logistics business, which generated more than 7 billion euros in revenue last year and employs 13,500 people.

Bollore said it would decide whether or not to exercise the option after consulting employee representatives.

The two companies had announced exclusive talks about the deal on April 18.

Buying Bollore’s second biggest business would allow cash-rich CMA CGM, which has embarked on an acquisition spree after making big profits during the pandemic, to bolster its bid to provide end-to-end transport services and supply chain management. The company said the deal would make it a top five player in global logistics.

Parting ways with the unit would significantly shrink the scope of billionaire Vincent Bollore’s conglomerate, which sold its African ports and logistics business last year to shipping company MSC Group for 5.7 billion euros.

The group still owns Bollore Energy, a distributor of petroleum products in France, but has been increasingly shifting its focus to media.

It is the top shareholder in French media giant Vivendi, home to pay-TV group Canal Plus, and holds an 18% stake in Universal Music Group. Vivendi is in the process of buying French publishing and retail group Lagardere.

Bollore said the deal price would amount to 4.65 billion euros before calculating debt and cash on completion date.

CMA CGM, privately controlled by the founding Saade family, has seen its earnings surge in the past two years on high freight rates and saturated supply chains.

It has used the profits to support an investment spree, including a stake in Air France-KLM, and, like its shipping rivals, has expanded in logistics.

[reuters]