It’s almost the end of an era. According to our information, PSA has put up for sale its residual interest in the logistician Gefco, one of its historical subsidiaries. The French manufacturer had already sold 75% of the capital of the company in 2012 to the Russian equivalent of the SNCF, RZD . At the time, PSA was financially dying, and had launched a vast program of asset sales. Gefco then bailed out the accounts for 800 million euros. The manufacturer, however, retained 25%, which he had to contract for 5 years. This deadline was reached last December.
Contacted, PSA says “to note that the operational performance of Gefco and the diversification of its customer portfolio no longer make it necessary to have a stake in the capital.” The group however specifies that “no operation is identified at this stage”.
Natural evolution
Luc Nadal, CEO of Gefco, also considers natural the announced evolution of shareholding: “Gefco plays a key role for PSA. By initially retaining 25% of the capital, with a number of rights in terms of governance attached to it, the builder wanted to ensure that the company would be in good hands. PSA is reassured today about the quality of the customer-supplier relationship that has been established “.
For example, if L’Oréal has a certain weight at Gefco, PSA remains the first customer with 1.8 billion euros of orders in 2017. The two partners had signed at the end of 2016 an exclusive agreement confiding to the logistician “the management and the optimization “of the entire supply chain of the manufacturer in the world for five years. An eight billion euro contract, which “strengthens Gefco as the leading PSA supplier in Europe”.
The manufacturer does not have the knife under the throat to sell, and seeks first to get a good price. According to a source familiar with the matter, PSA would like a valuation at the same level as in 2012, which would represent around 250 million euros for the 25%. The majority shareholder, the Russian Railways (RZD), will have a say.
The simplest solution, a partial IPO, is only feasible if RZD agrees to include some of its participation. Another option is a transfer to Investment Funds. But these will require clear strategic perspectives, and a clearly identified exit deadline.
In 1949, Peugeot created Franche-Comté’s Groupages Express (Gefco) for shipments departing from the Sochaux plant. Since then, the entity has grown well. Last year, the turnover Gefco rose 5% to more than 4.4 billion euros, and the operating margin is up 15%. Excluding PSA’s business, profitability growth would have even reached 8%, explained in January the management of the company, which employs 13,000 employees in 60 countries.