Home » 3PL/4PL, Breaking News » DSV acquires Panalpina for $4.6B

Panalpina Welttransport Holding AG announced on April 1 that it has agreed to Denmark-based DSV A/S’s proposal to acquire the Swiss supply chain solutions provider for CHF4.6 billion (US$4.62 billion), in a share exchange deal that will create a European logistics and freight forwarding powerhouse.

In a statement, Panalpina said it has reached an agreement with DSV on a combination by way of a public exchange offer to all Panalpina shareholders.

“The board of directors of Panalpina recommends that Panalpina shareholders accept the Public Exchange Offer,” Panalpina said.

It added: “The Public Exchange Offer already has the support of shareholders representing 69.9% of the registered shares of Panalpina, who have irrevocably agreed to tender their shares into the Public Exchange Offer. This includes Panalpina’s largest shareholder, Ernst Göhner Foundation and Cevian and Artisan.”

Under the deal, DSV will offer 2.375 DSV shares for one Panalpina share. Fractional DSV shares will be settled in cash. The exchange offer equals an implied offer price of CHF195.8 for each Panalpina share.

“The transaction has an enterprise value of approximately CHF 4.6 billion corresponding to DKK 30.5 billion,” said Panalpina.

The combination is expected to increase DSV’s annual revenue by close to 50%, which will rank the combined companies in the industry top four with a revenue of about DKK118 billion ($18 billion)  and a combined workforce of more than 60,000 employees. The combined company will have own operations in more than 90 countries.

Following completion, DSV will propose a change in name to “DSV Panalpina A/S,” which “reflects the long, rich history of both companies,” said the statement.

Subject to fiduciary duties, DSV has agreed with the board of directors of Panalpina to propose a dividend policy with a pay-out ratio to DSV’s shareholders of about 15% of net profit.

Peter Ulber, chairman of the Board of Panalpina, commented: “In the course of the past weeks, Panalpina’s board of directors and management has been exploring different strategic initiatives and held discussions with DSV about a potential combination. The board of director’s assessment is that the updated proposal of DSV is very attractive.”

He added that as a result, Panalpina’s earlier talks with Agility about a possible tie-up have been discontinued.

Ernst Göhner Foundation, Panalpina’s largest shareholder with a 46% stake, has agreed to tender all of its shares in the public exchange offer. The foundation is expected to become the largest shareholder of DSV with a holding of about 11% of the issued share capital.

“Ernst Göhner Foundation has undertaken not to sell or dispose of its DSV shares for a period of 24 months following settlement of the Public Exchange Offer, save for limited participation in share buy-back programmes that may be undertaken by DSV in the future,” said Panalpina.

It said scale remains one of the key competitive advantages in freight forwarding with significant operational and commercial benefits.

The air & sea division will be substantially strengthened and will be among the largest providers globally with close to 3 million containers (TEUs) and more than 1.5 million tonnes of air freight transported yearly.

The contract logistics division will be strengthened and Panalpina will bring additional warehousing capacity of more than 500,000 square meters.

DSV’s road network will be a strong addition to Panalpina’s existing service offering.

The combination will increase DSV’s exposure to the Asia-Pacific and the Americas, “thereby further balancing DSV’s geographical footprint,” Panalpina said.

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