DSV Panalpina targets growth after completing Agility GIL deal

DSV Panalpina has completed the takeover of the logistics arm of Agility – Global Integrated Logistics (GIL) — in a deal with an enterprise value of around $4.8bn.

The all-share deal will see Agility gain 8% of the total shares in the combined entity making it DSV Panalpina’s second largest shareholder.

The move will make DSV Panalpina one of the world’s top three freight forwarders in terms of revenues and consolidate its position as the third largest airfreight forwarder.

The Danish forwarder said that “the aim is to continue to grow the business from this strong position”.

“Today’s expected completion of the acquisition of GIL marks an important milestone on the growth journey for DSV,” the company said in a release.

“Within transport and logistics, size is critical and with the acquisition DSV fortifies its position as one of the world’s largest transport and logistics companies.”

The combined DSV and GIL business is aiming to grow through “enhanced service offerings for customers, market-leading IT infrastructure and economies of scale”.

“The focus on scalability remains one of the key competitive advantages in freight forwarding with significant operational and commercial benefits in a highly fragmented market,” it added.

DSV chief executive Jens Bjørn Andersen said: “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.”

Tarek Sultan, Agility vice chairman and chief executive said: “This deal affirms Agility’s global strategy and execution, and positions us for a new era of growth.

“We’re moving forward with a strategic investment in DSV, one of the world’s best-performing logistics providers.

“We will accelerate growth in the businesses we continue to operate, which historically account for around 80%of our EBIT. And we will continue investing in businesses that are driving sustainable innovation in supply chain and transportation.

“Our future will be built around businesses, technology and investment that expand access to global trade and make supply chains faster, smarter, greener, fairer and more efficient and resilient.”

The combined business it expected to operate with combined revenues of $26bn, which based on current growth rates should result in the company overtaking DB Schenker as the third largest forwarder behind Kuehne+Nagel after it agreed a deal this year to takeover Apex Logistics International.

In terms of airfreight, DSV Panalpina and GIL combined – based on last year’s figures – would have handled 1.6m tonnes, cementing its position as the third largest airfreight forwarder when K+N’s deal for Apex is taken into account.

“Moreover, the inclusion of GIL is building on DSV’s presence in both Asia Pacific and the Middle East,” DSV Panalpina said. “With 1.4m sq m 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.

Andersen added: “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.”

DSV said it will begin the integration process for the two companies, something it has recent experience in after acquiring Panalpina in 2019 and UTi Worldwide in 2016.

The two organisations will be merged on a country-by-country basis to continue “business as usual” until the country-specific merger process is initiated.