Panalpina accepts merger into DSV
The fourth biggest freight forwarder globally behind DHL Logistics, Kuehne + Nagel and DB Schenker is born
DSV has reached an agreement with Panalpina to merge operations following a takeover bid worth $4.6 billion. Pursuant to the Public Exchange Offer, DSV will offer 2.375 DSV shares (with a nominal value of DKK 1 per share) for 1 Panalpina share. Provided the offer meets regulatory approval in June, the combined company will take on the name DSV Panalpina and will become the fourth biggest freight forwarder globally behind DHL Logistics, Kuehne + Nagel and DB Schenker.
The combination is expected to increase DSV’s annual revenue by 50% to 118 billion Danish kroner ($17.7 billion) and will result in a combined workforce of 60,000 employees.
“A combination of DSV and Panalpina further strengthens our position as a leading global freight forwarding company” said Kurt Larsen, chairman of DSV. “Together, we can present a strong global network and enhanced service offering to our clients, further solidifying our competitive edge in the industry. It’s a great match on all parameters. Panalpina is a great company and we’re very excited by the possibility to join forces and to welcome Panalpina’s talented staff.”
DSV is one of top five global logistics companies after a spate of buyouts including UTi Worldwide in 2015. October last year the Danish logistics provider made an unsuccessful bid for CEVA Logistics and hence made a confirmation of its interest to buy Panalpina upon a $4 billion offer made in January.
DSV’s Air & Sea division (one of three) will grow to be one of the largest providers globally, handling 3 million containers and 1.5 million tonnes of air freight yearly. Its contract logistics Solutions division will be strengthened with additional warehousing capacity of 500,000 sq.m.
“In the course of the past weeks, Panalpina’s board of directors and management have been exploring different strategic initiatives and held discussions with DSV about a potential combination. The board of directors’ assessment is that the updated proposal of DSV is very attractive. We are now looking forward to joining forces with DSV and contributing to creating one of the world’s largest transport and logistics companies”commented Peter Ulber, chairman of Panalpina-
Some 20% of DSV’s overall takings are made through automotive services; the company has a 60:40 split between OEMs and tier suppliers, with Renault-Nissan its biggest OEM customer.
An integration committee comprising an equal number of Panalpina and DSV representatives will be established to oversee the integration process and ensure a fair treatment of all employees. A thorough evaluation will be carried out to maintain relevant functions and competences in Switzerland.
At completion of the transaction Ernst Göhner Foundation, Panalpina’s largest shareholder with a 46% stake, is to become the largest shareholder of DSV with a holding of 11% of the issued share capital. DSV has undertaken to nominate and recommend to its shareholders that a candidate proposed by Ernst Göhner Foundation will be elected to the board of directors of DSV A/S. Ernst Göhner Foundation has undertaken not to sell or dispose of its DSV shares for a period of 24 months following settlement of the Public Exchange Offer, save for limited participation in share buy-back programmes that may be undertaken by DSV in the future.