Kuwait-based Agility, one of the biggest logistics companies in the Mena region, has finalised its £763 million ($921.5m) acquisition of UK-based aviation company John Menzies in a deal that creates the world's biggest aviation services provider.
Agility will be merging its subsidiary, National Aviation Services (NAS), with John Menzies, after having completed all regulatory requirements, it said in a filing on Thursday to the Dubai Financial Market, where its shares are traded.
The combined entity in the deal will operate as Menzies Aviation, which will become the world’s largest airport services company by number of countries and second largest by number of airports served, Agility said.
The combined revenue of John Menzies and NAS exceeded $1.5 billion in 2021, and the merged company will have about 35,000 employees and operations at 254 airports spread across 58 countries on six continents.
Menzies Aviation is poised to handle 600,000 aircraft turns, two million tonnes of air cargo and 2.5 million fuelling turns annually.
“Menzies and NAS will create the world leader in aviation services,” said NAS chief executive Hassan El Houry, who will become chairman of Menzies Aviation.
“We will have the scale and resources to expand and grow as the industry recovers from the Covid-19 pandemic. Commercial aviation is a key engine of global economic growth, and our customers need partners they can count on as flight volumes return.”
The aviation industry's growth was affected by the coronavirus-induced slowdown but has since recovered as restrictions and flight bans related to the health crisis were lifted.
Airlines are expected to narrow their losses in 2022 — from $42bn last year to $9.7bn this year — as air travel demand rebounds strongly, with a return to profitability expected in 2023, the International Air Transport Association said in June.
The airport services market is expected to be valued at about $98bn in 2022 and grow to more than $290.23bn by 2029 at a compound annual rate of about 17 per cent, according to Fortune Business Insights.
Meanwhile, global air cargo demand dropped 6.4 per cent annually in June as new export orders fell and the Russia-Ukraine war limited freight capacity, IATA said on Wednesday.
Agility said last month that it was refinancing and more than doubling its credit lines to fund the John Menzies acquisition and drive other plans for business growth.
Menzies Aviation's customers will include the UAE's Emirates and Flydubai, Air Canada, Air China, Air France-KLM and American Airlines.
“Agility’s backing gives us the resources to provide innovative solutions for growing and forward-thinking customers, and to develop our talent, technology and sustainability — critical factors for our future success,” said Philipp Joeinig, who will become chief executive of the combined company.
“It also means we are well-positioned to support our customers in tackling supply chain challenges and labour shortages.”
Agility reported a 1 per cent rise in its fiscal first-quarter net income as revenue surged 22.3 per cent to 132.1m Kuwaiti dinars ($430m) in the quarter.
Net profit attributable to equity holders for the period ended March climbed to 12.8m dinars.