Monday, January 4, 2021

Deal Between Two Freight Industry Giants Sees Food, Drink and Technology Contracts Change Hands

Major Sell Off of Logistics Business Completed
Shipping News Feature

UK – It was back in March 2020, just as the country entered its first major lockdown in an attempt to stop the virus in its tracks, we reported that Swiss headquartered freight forwarding giant Kuehne + Nagel was selling off its British contract logistics interests to another industry behemoth.

Now, 10 months later the deal in which XPO Logistics picked up that particular portfolio has been finalised, with neither side admitting to how much was involved. The UK transaction closes after the unconditional approval by the British Competition and Market Authority. The scope includes the drinks logistics, food services and retail & technology businesses, and K+N says it remains highly committed to excellent customer solutions and service in the UK despite the sale.

The figures quoted at the time valued the operations transferred business as accruing in excess of £600 million annually and employing 7,500 staff, and the plans for the divestment were put in place a full year before our original story, with the avowed intent to ‘improve profitability and focus on core, scalable solutions’.

The move in Britain follows a pattern for K+N after the sale of the Contract Logistics activities in Argentina, the chilled FMCG portfolio in France as well as a portfolio of real estate assets. Dr. Joerg Wolle, Chairman of Kuehne + Nagel International AG, commented:

"We initiated the strategic review of our Contract Logistics activities by the Board of Directors in early 2019 and informed our business partners and the public accordingly. With the divestment of parts of our contract logistics business in the UK, the focused, comprehensive restructuring process was successfully completed.

”The business unit is now well positioned to concentrate on scalable solutions worldwide, particularly in the e-commerce and pharmaceutical sectors."

Certainly, whilst e-commerce is on everyone's to do list, pharmaceuticals seem to be playing a major part in K+N plans for the future, with a tally of shipments including a record air freight shipment to China from Italy.