Wednesday, January 16, 2019

Acquisition of Swiss Freight Forwarding Agency Could Create Third Largest Global Logistics Group  

DSV Bids Unbidden for Panalpina

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Shipping News Feature DENMARK – SWITZERLAND – From comparatively humble beginnings DSV has evolved in forty years from a collective of ten local road haulage operators to a proclaimed top five global freight forwarding outfit, and now comes the news that the group has made an unsolicited bid for Swiss headquartered Panalpina. Currently Panalpina ranks as the fifth largest ocean freight forwarder with DSV one place back with slightly less share of that market.

The true picture is more complex however with both companies having sizeable interests in other logistics sectors. DSV had revenues in 2017 equating to approximately $11.5 billion with 45,000 employees worldwide as opposed to Panalpina’s $8.3 billion (2016) employing around a third of the Danish group’s total at 15,000.

DSV says that a combination with Panalpina would create a leading global transport and logistics company with significant growth opportunities and potential for value creation. It opines that this is a unique opportunity for both companies and their respective stakeholders including shareholders, employees, customers and suppliers. The Swiss company has yet to respond to the offer which equates to CHF 170 per share (as at close of trading January 11).

The offer from DSV to the directors of Panalpina actually consists of 1.58 DSV shares and CHF 55 in cash for each Panalpina share. This would provide Panalpina’s shareholders with a premium of 24% to Panalpina’s closing share price of CHF 137.5 as of 11 January 2019 and 31% to the 60-day VWAP of CHF 129.5 as of 11 January 2019. The combined business would generate expected revenues of more than DKK 110 billion ($16.83 billion) and EBITDA of more than DKK 7 billion (1.07 billion) on a pro-forma 2018 basis (excluding any synergy benefits).

DSV has largely achieved its world status on the back of deals such as this. In October it withdrew its revised offer of CHF 30 for another Swiss logistics group, CEVA, after French container line CMA CGM increased its own shareholding in that company. Historically there is a list of purchases all designed to grow the organisation, including Samson Transport (1997), DFDS Dan Transport Group (2000), J.H.Bachmann (2004), Frans Maas (2006), ABX Logistics (2008) and UTi Worldwide (2015).

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