DSV agreed to acquire Swiss rival Panalpina Welttransport in a deal worth $4.6 billion that will create a European powerhouse in logistics and freight forwarding.
The board of directors of Panalpina, which had been fighting for its independence, recommended shareholders accept the mostly stock offer worth 196 Swiss francs a share, the companies said on Monday.
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, according to the two companies. Panalpina shares were indicated 16.6 per cent higher in the pre-market.
The deal ends months of speculation about the future of Panalpina, which in mid-February announced talks with Kuwait-based Agility, one of the biggest logistics companies in the Arabian Gulf, for a logistics tie-up of its own in an effort to avoid being taken over by Denmark’s DSV. Panalpina minority shareholders, including Cevian Capital 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 Monday.
“We welcome the agreement between Panalpina and DSV,” said Lars Forberg, managing partner at Cevian Capital. “We believe the combination has great industrial logic and will create one of the best companies in the logistics industry.”
DSV made a first unsolicited offer worth 17O Swiss francs a share before sweetening the bid to 180 Swiss francs per share, valuing the target at about 4.3 billion Swiss francs (Dh15.85bn). 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 $1.7bn 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.