An announcement was made by DSV Panalpina about the new acquisition of Kuwait-based Agility Public Warehousing logistics wing with a deal worth $4.2 billion. After this deal, the company will stand at third position in freight forwarding in the global market. The acquisition will offer freight facilities to 90 countries.
The acquisition will be an all-stock deal occurring in the third quarter. 19.3 million shares offered to the company will finalize the deal which is nearly 8% of DSV’s outstanding stock. It is a huge deal that was expected post the Panalpina acquisition in 2020 by DSV after the agreement which was announced to be $4.6 billion. Though, the company became the fourth leader in the fragmented freight forwarding industry it recorded less than 5% market share. Through the present accord, Global Integrated Logistics will bring 23% of additional annual revenue into DSV Panalpina.
Agility’s performance in the last year during turbulent times was significant the company reported profits of 2020 of KD 4.6 million. There has been a 52.1% decline from 2019. With an increase in revenue of 2.7% reaching KD 1.6 billion and EBITDA reached KD 162.4 million and saw a decrease of 15.9%.
The deal is expected to be a perfect match strategically which accelerates growth in the sea and air businesses and Agility works on similar techniques and strategies. The acquisition therefore they will have a substantial impact as the companies dealing can integrate culture and business models. Additionally, DSV can also enjoy the advantage of the strength Agility has in the Middle East and the Asia Pacific with better plans while dealing with emerging markets.
As the economies are rising and countries expect economic rebound the acquisition will not hamper employment in the companies. As per DSV the companies will have consolidated operations, logistics facilities, administration, and infrastructure without employment loss as DSV has employees around 57,000, and Agility has nearly 17,000. DSV Group has the vision to offer impeccable service levels to the customers with strong global networks of both companies. The combination of the two big market leaders plans to transport 2.8 million ocean containers and 1.6 million airfreight tonnes on an annual basis.