DSV Acquires Panalpina In US$4.6 billion Deal

All-share Voluntary Public Tender Offer for Swiss Rival

Danish logistics specialist DSV has agreed to acquire rival Panalpina Welttransport via an all-share voluntary public tender offer, valued at US$4.6 billion.
The agreement will see two of Switzerland’s largest breakbulk handling companies merge to form “one of the world’s largest transport and logistics companies.” Following successful completion, DSV has proposed a name change to DSV Panalpina A/S.
"A combination of DSV and Panalpina further strengthens our position as a leading global freight forwarding company. 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,” said Kurt Larsen, DSV chairman.

Freight sector consolidation continues
The merger of the two Swiss firms is the latest in a number of consolidations in the rail industry, a sector where both DSV and Palapina are strong. This trend is expected to persist in 2019 as low margins continue to bite.
The increasing rate and scale of such deals indicate that the rail industry is set for more consolidation,” said Viswanath Machiraju, Strategy head at consultancy Cyient notes, adding that “standardization and harmonization of asset platforms, supply chain optimizations and wider global footprint are few of the critical drivers leading to such exercises.”
Ongoing trade tensions between the U.S. and China have had global repercussions on the freight-forwarding industry and are driving support for a new wave of consolidation in the highly fragmented sector.

43% Premium

The deal proposed by DSV values Panalpina at 196 Swiss francs a share, a 43 percent premium from Panalpina’s closing price on Jan. 15.
"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,” said Peter Ulber, chairman of Panalpina.

Pending approval from regulatory bodies the deal will see the creation of a combined company with pro forma revenue of about DKK 118 billion (US$17.8 billion) and a workforce of more than 60,000 employees operating in 90 countries.