DSV to buy Panalpina in £3.5bn pan-European deal

Panalpina and DSV have agreed a multi-billion pound tie-up which will create the one of the world’s biggest freight specialists, ending weeks of takeover speculation between the two logistics firms.

Under the deal, Denmark’s DSV will offer 2.375 shares for every one share in Switzerland’s Panalpina. The recommended cash offer has an enterprise value of around 4.6bn Swiss francs and will create the world’s fourth-largest freight-forwarding company behind DHL Logistics, Kuehne & Nagel and DB Schenker.

DSV first approached Panalpina in January, but its initial offer was rebuffed by shareholders including the Ernst Göhner Foundation. It is Panalpina’s largest investor with a 46% stake, but Panalpina said on Monday that the DSV’s latest offer had secured the backing of the Foundation and other shareholders holding a total of 69.9% of the registered shares.

Kurt Larsen, chairman of DSV, said: “Together we can present a strong global next and enhanced service offering to our clients, further solidifying our competitive edge in the industry. It’s a great match on all parameters.”

Peter Ulber, chairman of the board of Panalpina, called DSV’s latest offer “very attractive”.

He continued: “In the course of the past weeks, Panalpina’s board of directors and management have been exploring different strategic initiatives and held discussions with DSV about a potential combination.

“We are now looking forward to join forces with DSV and contribute to creating one pf the world’s largest transports and logistics companies. Our customers will be able to benefit from a stronger network and service offering as well as competencies and skills.”

Joel Spungin, analyst at Berenberg, said the announcement was “slightly unexpected”, as there had been speculation that the Foundation was pushing for Panalpina to remain independent.

He added that the tie-up made “strong strategic sense”, noting: “It would be the biggest air freight-forwarder by volumes and third-largest sea freight-forwarder. Three quarters of profits would come from high margin air and sea activities, more than all of its closest peers.

“With the industry coming under pressure from technology change and increasing competition, we believe scale will become increasingly important."