Monday, August 16, 2021

Huge Deal Puts Group Into Top Three Global Logistics Operations

Final Touches Mean a Fait Accompli for Danish Outfit
Shipping News Feature

DENMARK – KUWAIT – WORLDWIDE – The huge deal to see DSV Panalpina A/S (DSV) take control of the Global Integrated Logistics business (GIL) of Kuwaiti group Agility, which we announced in April, seems to now be done and dusted.

As we said at the time this pushes the combined operation into the top three of global logistics operations, continuing DSV’s phenomenal but balanced rise from a batch of Danish hauliers to the prime position the group holds today.

In an announcement DSV said that completion of the acquisition of GIL marks an important milestone in the company’s history, in line with its conviction that in transport and logistics, size is critical. Jens Bjørn Andersen, Group CEO, DSV commented:

“I am very pleased to welcome our new colleagues from GIL on this important day. There are many similarities when you look at our two companies both in terms of the business models and services and, not least, when we look at our shared focus on local empowerment and putting customers first.

”DSV and GIL simply constitute an excellent match. We will now start the integration, and, together, we are going to grow the business and bring even more value to our many customers, partners and shareholders than we do separately.

“By adding the GIL network and competencies to our existing network, we improve our competitiveness across all three divisions: Air & Sea, Road and Solutions. This brings commercial synergies and cross-selling opportunities while at the same time providing our customers with an even higher service level and a one-stop-shop for logistics needs.”

The enterprise value of the transaction is approximately DKK 30.2 billion and the equity value approximately DKK 29.6 billion. The combination of DSV and GIL will have an expected combined pro forma revenue of approximately DKK 160 billion (based on last 12 months) and a combined workforce of 75,000 employees in more than 90 countries.

As consideration for 100% of GIL, Agility receives DSV shares representing approximately 8% of all post-transaction outstanding shares of DSV. This will make Agility the second largest DSV shareholder based on today’s shareholder register. After completion of the transaction, DSV has agreed to nominate an Agility representative to DSV’s Board of Directors.

GIL has an annual revenue of DKK 29 billion (USD 4.6 billion) with Air & Sea freight as the main contributor. This will be added to DSV’s existing global network. Moreover, the inclusion of GIL is building on DSV’s presence in both APAC and the Middle East. With 1.4 million square metres of warehousing capacity, GIL will be a strong addition to DSV Solutions, while the road freight activities in Europe and the Middle East will strengthen the DSV Road network.

The two organisations will be merged in a country-by-country process, which means that for customers and employees in many countries the coming period will be business as usual until the country-specific merger process is initiated. As has been a key focus in previous acquisitions, DSV says it will be approaching this integration with due respect for both organisational and individual considerations, however such deals rarely mean all employees or offices will be retained.

Despite the completion of the transaction, and in line with what has been agreed, DSV says regulatory clearances are still pending in a limited number of jurisdictions where revenues individually and combined are insignificant compared to the combined post-completion revenue, and in each such jurisdiction completion of the acquisition and commencement of integration activities are awaiting the relevant regulatory clearance.

Photo: DSV HQ.