DSV assumes Panalpina for 4.6 billion francs


Panalpina is now valued at 4.6 billion. (Picture: Keystone)

The Panalpina Swiss logistics group is acquired by DSV. The Danes pay a total of 4.6 billion francs for Basler.

Panalpina's three largest shareholders will offer their shares to DSV as part of a public exchange offer. The decision was preceded by a conflict in the shareholders' association about the future of Panalpina.

For a long time two fields have faced each other: on the one hand, the Ernst Göhner Foundation (EGS), which owns 46% of the company, and Cevian Capital and Artisan Partners, each with about 12%.

While the Ernst Göhner Foundation had advocated a solo effort, the two activist investors were open to a merger from the start. After the second improvement of the offer by DSV, the foundation has now become apparently weak.

Initially, DSV offered 170 francs per share from Panalpina in January and, in a first step, also sold 180 francs. After further improvement, DSV now pays 2,375 shares in treasury per share of Panalpina. That's 195.80 francs per share, according to last Friday's price.

Thus, the Basler Group is valued at 4.6 billion francs, as DSV and Panalpina announced on Monday.

Expected fourth quarter closing

The transaction is expected to be completed in the fourth quarter of 2019, according to the press release. The company name should then be changed to "DSV Panalpina A / S". Panalpina's integration is expected to take two to three years, DSV CEO Jens Björn Andersson told Reuters.

For the agreement to be concluded, 80% of Panalpina's shareholders must offer their shares. However, with EGS, Cevian and Artisan, the exchange offer is already supported by the shareholders, who hold a total of 69.9% of the shares.

EGS becomes the largest shareholder of DSV through the parent shareholder business of Panalpina. After completion of the transaction, the foundation is expected to hold about 11% of the Danish group.

As can be seen in the official pre-announcement of the agreement, the philanthropic foundation also receives a seat on the board of directors of DSV. In addition, EGS has undertaken not to sell its shares of DSV for a period of two years.

DSV, for its part, has already reached an agreement with Panalpina's Board of Directors on a future dividend policy for DSV's shareholders after the merger. The goal is to achieve a payment rate of approximately 15% of net income.

Cevian welcomes merger

Above all, the minority shareholders of Panalpina are satisfied with the agreement reached. "We are convinced that the merger has a strong industrial logic and will create one of the leading companies in the logistics industry," said Lars Förberg, co-founder of Cevian Capital, on AWP.

In fact, combined pro forma turnover would rise to about 118 billion Danish kroner (about 18.2 billion Swiss francs) after the completion of the exchange offer. For comparison: the Swiss dog Kuehne + Nagel generated 2018 sales of more than 20 billion.

The combined workforce of the two companies will be about 60,000 employees. No statement has yet made DSV a potential job cut, which could be linked to the acquisition.

Basically, the two companies sell the merger, but as a growth project. It's mainly about expanding further. In cases of dual occupations, it may also be eliminated, but it should be heard on Monday by business circles.

At the same time, Panalpina ended its talks with the agility of Kuwait over a possible merger or cooperation. These were presented as an alternative to the agreement with the DSV.

Panalpina is being excluded from Denmark

It is already clear that Panalpina's shares will disappear from the SIX Swiss Exchange. The new company 'DSV Panalpina A / S' will be listed in Copenhagen.

With the end of Panalpina's independence, a long history of the company comes to an end. The group was founded in 1935. It returned to a shipping company of the Rhine, whose roots came to the year 1895. The listing on the Swiss stock exchange SIX occurred in 2005.


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