China Merchants Port Holdings Company Limited (CMPort) has entered into the share purchase agreement with TCP Participações S.A. and the selling shareholders through the firm’s wholly owned subsidiary Kong Rise Development Limited to acquire a 90 percent stake in the Port of Paranaguá in Brazil for approximately $924 million.
TCP and its subsidiaries are principally engaged in operating the container terminal concession in the Port of Paranaguá. The port is the second-largest container terminal in Brazil with currently a design capacity of 1.5 million TEUs each year, which will be further increased to 2.4 million TEUs each year upon completion of the planned expansion, which is expected to commence work later this year and expected to complete by the second half of 2019.
CMPort already has existing ports in Southern Asia, Africa, North America and Europe, but the acquisition of TCP will allow CMPort to further its overseas global port network. Furthermore, the investment will provide CMPort with opportunities to make use of the marine transportation hub of TCP to develop its logistics network, export/import and industrial zone and potential residential projects and related financial service platforms, allowing for greater commercial synergies within CMPort.
“Brazil is the largest economy in Latin America with huge market potential and abundant resources and reserves,” said Dr. Hu Jianhua, vice chairman of CMPort and the executive vice president of China Merchants Group Limited. “Brazil is also a member of the BRICS group of nations and is China’s most important comprehensive strategic partner and trade counterpart in Latin America. The transaction serves CMG’s intention to promote commercial cooperation with the BRICS countries and the ‘China Brazil Joint Action Plan’.”
The transaction will also enhance the trade development between Brazil and China and the comprehensive strategic cooperation relationship of the two countries, said Dr. Jianhua.
“TCP is not only CMPort’s cornerstone to enter Brazil, but also the future hub of the rising commodity and goods trade flow between Brazil and China,” said Dr. Bai Jingtao, managing director of CMPort.
Dr. Jingtao added, “This landmark acquisition demonstrates CMPort’s confidence in the Brazilian economy and its commitment to contribute to the development of the country’s infrastructure and the increased flow of business between BRICS countries.”
