DSV to acquire Panalpina in US$4.6b European logistics deal

DANISH logistics company DSV is to acquire its Swiss rival Panalpina in an all-stock deal worth about CHF4

02 April 2019 - 19:00

DANISH logistics company DSV is to acquire its Swiss rival Panalpina in an all-stock deal worth about CHF4.6 billion (US$4.6 billion) that will create the world's fourth largest freight forwarder with annual pro forma revenue of approximately DKK118 billion (US$17.7 billion) and a combined workforce of more than 60,000 employees.

The board of directors of Panalpina recommended shareholders accept the mostly stock offer worth CHF196 a share, the companies said in a statement, according to Bloomberg.

The price represents a 43 per cent premium from January 15, the day before DSV's initial proposal, and has the backing of investors holding 69.9 per cent of registered shares including the Ernst Goehner Foundation, which owns 46 per cent of Panalpina and had rebuffed a previous offer.

DSV is paying a 'hefty' price, Zuercher Kantonalbank analyst Marco Strittmatter, who has a market perform recommendation on the Swiss logistics company, wrote in a note.

The deal ends months of speculation about the future of Panalpina, which in mid-February announced talks with Agility for a logistics tie-up in an effort to avoid being taken over by DSV.

Minority shareholders, including Cevian Capital AB and Artisan Partners, went public with comments in favour of a DSV takeover, adding pressure on Panalpina's management and the foundation. Both investors back the offer, the companies said.

'We welcome the agreement between Panalpina and DSV,' Lars Forberg, managing partner at Cevian Capital, said in a separate statement. 'We believe the combination has great industrial logic and will create one of the best companies in the logistics industry.'

After the deal, the Ernst Goehner Foundation will become DSV's top holder. The takeover comes months after DSV walked away from another Swiss target, Ceva Logistics, after its offer worth $1.7 billion was rejected. DSV said at the time it would pursue other targets. Panalpina will help boost its air-cargo volumes and ocean-going containers operations, complementing the Danish group's strength in road shipments.

The global freight-forwarding industry is coming under increasing pressure amid trade tensions between the US and China. Leading players in the highly fragmented sector are also targeting bigger deals to tap new markets and add cutting edge processing systems to safeguard them from disruptive technology.


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