Kuwait's Agility Unit Bought By Danish Firm In $4.1bln Deal

DSV Panalpina said on Tuesday it had agreed to acquire the logistics division of Kuwait's Agility Public Warehousing Co in an all-share deal worth $4.1 billion, creating the world's third largest freight forwarding company.

The deal comes less than two years after Copenhagen-based DSV bought Swiss logistics group Panalpina for 37 billion crowns ($6.01 billion), and will see it overtake DB Schenker, behind only DHL Logistics and Kuehne & Nagel as measured by revenue.

Shares in DSV jumped 8.4% by 0721 GMT to hit a record high.

"This is very positive news and exactly what has been at the top of investors' wishlist," said Mikkel Emil Jensen, analyst at Sydbank.

"And it's exactly what DSV want more of, and where they are strongest in terms of earnings, so there is an opportunity to create really good synergies," he added.

Agility's logistics unit had revenue of $4 billion last year, 80% of which was in air and freight, and around 17,000 employees.

Under the deal, DSV Panalpina will transfer 19.3 million new shares worth 1 Danish crown each to Agility, representing around 8% of its shares, making the Kuwait company the second largest shareholder in DSV.

DSV expects the Agility unit to be fully integrated around a year after the transaction closes in the third quarter.

"Agility's Global Integrated Logistics business and DSV are an excellent match, and we are proud that we can announce our agreement to unite," DSV's CEO Jens Bjorn Andersen said in a statement.

"Agility's Global Integrated Logistics (GIL) 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," he said.

DSV Panalpina also reported first-quarter operating profit above expectations on Tuesday and raised its expectations for full-year profit.

Its operating profit before special items stood at 3.07 billion crowns, topping the 2.70 billion expected by analysts for the January-March quarter in a poll gathered by the company.

DSV raised its forecast for annual operating profit before special items to 11.25 billion-12.0 billion crowns from 10.5 billion-11.5 billion.

 

SOURCE : ZAWYA

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