Late last week, the acquisition of Basel, Switzerland-based global 3PL and airfreight forwarder Panalpina by Hedehusene, Denmark-based global 3PL DSV was made official, according to DSV officials.
As previously reported, DSV will buy Panalpina for $4.6 billion, with DSV becoming of the world’s largest transportation and logistics services providers with a combined pro forma revenue of more than $17 billion and more than 60,000 employees in 90 countries.
When this deal was initially announced, DSV said that this deal is expected to boost the company’s annual revenue by around 50%, making the combined entity a top four global 3PL for revenue, with operations in more than 90 countries.
“We are very excited to welcome Panalpina’s customers, employees and shareholders to DSV,” said Panalpina CEO Jens Bjørn Andersen in a statement.
“Our two companies will achieve more together, creating even more value for all our stakeholders,” he said. “The settlement of the deal marks the beginning of the integration process, during which we will strive to provide the high level of service our customers know and rely on.”
With the acquisition now complete, DSV A/S will change its registered name to “DSV Panalpina A/S,” and, going forward in conjunction with the integration, all of its subsidiaries and operational activities will be meshed under the DSV name and brand.
As for the next steps regarding the integration of DSV into Panalpina, DSV said that CEO Andersen and CFO Jens H. Lund will be part of Panalpina’s new executive board, with the appointment of a new Executive Management team expected to occur in the coming days. From that point, it said the integration will transition into various regions and counties, in addition to global and HQ functions. As for the integration timeline, DSV said it is expected to take two-to-three years, with most of the operational integration components to be completed in the next two years.
“DSV and Panalpina alike strive to provide a seamless customer experience across all geographies and in key industry verticals,” said DSV. “This will not change going forward, and already strong customer relationships will benefit from increased expertise, improved services, and operational excellence. As we move forward with the integration, it is our firm intention that our customers continue to experience an uninterrupted, high level of service.”
Earlier this year, Thomas Cullen, analyst at London-based Transport Intelligence, wrote in a research note that the prospects of the new company are also likely to be better than that of Panalpina, and is possibly the most attractive logistics service provider in the world.
“There are risks in this deal,” he noted. “The success of DSV in the merger of its previous acquisitions has been facilitated by the clarity of its management structure. With significant Panalpina influence in the new, merged company there is a possibility that this will be diluted. None-the-less DSV-Panalpina will be an important logistics service provider in the global market. DSV states that it will probably be the second largest air freight forwarder in the world and the fourth largest sea freight forwarder. However, the new company is rather heavily exposed to European markets and is also dominated by freight forwarding with contract logistics being just 14% of sales. The challenge now is for the new merged company to deliver the sort of integration performance that DSV’s management has delivered in the past.”
And Evan Armstrong, president of supply chain consultancy Armstrong & Associates, said that the merger will advance DSV/Panlalpina to the fourth largest global 3PL based upon his firm's 2018 top 50 global 3PL list and will provide DSV/Panalpina with more opportunities to cross sell integrated solutions and drive better buy-side purchasing power with carriers from its greatly expanded freight forwarding volumes.
“Panalpina is the fourth largest air freight forwarder and DSV is the tenth largest; combined, they would have over 1.6M metric tons of air freight under management making them the second largest air freight forwarder,” he said. “In terms of ocean TEU, Panalpina and DSV are ranked fifth and sixth respectively, the combined operation would bring them to 2.9M TEUs pushing them into fourth place just behind DHL SC & GF. Panalpina’s operations will benefit from upgrading to DSV’s I.T. platform and becoming part of its solid corporate culture.”