DSV Panalpina take over Agility GIL in $4.2bn deal

DSV is set to become a top three global forwarder as it continues its expansion through the planned acquisition of Agility Global Integrated Logistics (GIL) in a deal worth around $4.2bn, says release.

The purchase is expected to increase DSV’s annual revenue by around 23%, which will rank the combined company as one of the top three forwarders with revenues of around $22bn and a workforce of more than 70,000 employees.

The acquisition will be an all-share transaction and closing is expected in the third quarter of 2021.

The deal will be funded through the issue of 19.3m new shares in DSV, which will give Agility an 8% shareholding in the combined entity, making it the second largest shareholder.

DSV said that acquisitions are an integral part of its strategy and added that it has a “track record of successful integrations”.

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

“The air and sea division will be strengthened and will further cement its position as one of the largest providers globally with more than 2.8m containers (TEUs) and more than 1.6m tonnes of airfreight transported annually.

“GIL’s presence in the fast-growing emerging markets in Asia Pacific (APAC) as well as Europe and Americas will be a strong addition to DSV’s existing network.”

“Contract logistics capabilities are increasingly important due to complex supply chains and changing distribution channels.

“GIL will bring additional warehousing capacity of more than 1.4m sq m, mainly in APAC and the Middle East,and thereby significantly strengthen the solutions division.

“Finally, GIL will add road freight activities to DSV’s network in Europe and the Middle East.”

In terms of market impact, in 2020 GIL had $4bn in revenue, of which approximately 80% is related to air and ocean freight.

In 2019, DSV ranked in fifth in terms of revenues, behind Nippon Express, DB Schenker, Kuehne+Nagel and DHL Global Forwarding.

The deal will see it move above Nippon Express and DB Schenker.

It will also rank in the top three in terms of airfreight, with the purchase pushing the Copenhagen-headquartered forwarder into the top three overtaking DB Schenker and behind DHL Global Forwarding and Kuehne+Nagel.

Jens Bjørn Andersen, group chief executive of DSV, said: “Agility’s Global Integrated Logistics business and DSV are an excellent match, and we are proud that we can announce our agreement to unite.

“The combination of our two global networks will provide us with the opportunity to offer our customers an even higher service level.

“GIL’s global network, industry competencies and strong market position in APAC and the Middle East complement DSV’s network well and will support our long-term value creation ambitions.

“Our two groups of companies already share a culture of entrepreneurship and local ownership, and we look forward to welcoming GIL’s talented staff to DSV.”

Tarek Sultan, vice-chairman, Agility, added: “This deal creates significant shareholder value and marks a new milestone in Agility’s journey.

“Agility remains committed to the supply chain industry and will become the second largest shareholder in one of the fastest growing and most profitable logistics companies in the world.”

DSV said the transaction is expected to be earnings per share accretive (diluted and adjusted) in year two after completion of the transaction.

It is DSV’s aspiration to lift the operating margin of the combined entity to DSV’s existing levels within the respective business areas.

DSV is not the only large forwarder looking to expand through acquisitions this year. In February Kuehne+Nagel announced plans to purchase Apex International as it looks to expand its presence in the Asia Pacific market.

The deal, when completed, will make Kuehne+Nagel the world’s largest airfreight forwarder.

Chief executive of consultancy Transport Intelligence, John Manners-Bell, said the deal reflected ongoing consolidation in the forwarding market.

“Further consolidation in the freight forwarding market is hardly unexpected and the purchase of Agility Integrated Logistics by DSV Panalpina must be put in the context of two decades of intense acquisition activity,” he said.

“Agility itself has been made up of over 40 deals as forwarders pursue strategies that allow them to build strength and depth on a worldwide basis, not least giving them buying power over shipping and airlines.

“Although acquisitions are never straightforward, DSV’s management has shown time and again that they have discovered the formula to integrate and even turn around the most challenged of companies. I expect the same in this case, as DSV becomes an even bigger rival to DHL Global Forwarding and Kuehne + Nagel on many key trade routes and sectors.”Share this story

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