FedEx Corp. said it has agreed to sell its FedEx Supply Chain unit to the CMA CGM Group for $1.4 billion. 

The deal, expected to close later this year, will nearly triple the size of Ceva Logistics’ North American contract logistics operations, a subsidiary of the CMA CGM Group. The combined entity will operate 150 warehouses and expand Ceva’s overall presence in North America, with a combined workforce of 20,000 people across more than 240 locations.

“Today’s announcement enables FedEx to further increase our focus on providing our unique expertise for high-value verticals, including healthcare, automotive, aerospace and data centers,” said Raj Subramaniam, president and CEO of FedEx. “By streamlining our portfolio, FedEx is better positioned to execute our long-term vision and continue to serve as the heartbeat of the industrial economy, delivering unmatched connectivity, reliability, and value to our customers globally.”

Once the transition is complete, CMA CGM and FedEx plan to enter into multi-year commercial agreements for air and ocean freight. CMA CGM will become FedEx’s preferred ocean carrier, and the companies will also work together on select air cargo capacity solutions.

“The acquisition and partnership with FedEx represent a major step in the development of CEVA Logistics and our logistics activities in North America,” said Rodolphe Saadé, chairman and CEO of the CMA CGM Group, We are strengthening our ability to provide customers with integrated supply chain solutions. These deals also reinforce our long-term commitment to investing in the United States and supporting the resilience and efficiency of its supply chain.”