The retirement of Kurt Larsen, DSV’s Chairman and one of the two men behind the company’s growth over the past thirty years, does not seem to have tempted the company to reconsider its approach.
The new Chairman of what is now DSV Panalpina, Professor Thomas Plenborg, has been discussing the future of the company and asserting that there will be no change in the ‘growth by acquisition’ strategy taken by Mr Larsen and his former colleague Leif Tullberg.
In remarks made after a board meeting, Professor Plenborg commented that “we all have faith in the existing vision and strategy. It has proven very successful in creating value, which is the foundation of all development, so we need to keep doing what we’ve been doing right”. However, he said, over the next eighteen months the company will concentrate “100% on the integration of Panalpina.”
After that it is a different matter. Professor Plenborg observed “then I think we’ll start to talk about the possibility of boosting organic growth through another M&A. The industry is still very fragmented, and there’s lots of scope for further consolidation”. He continued, commenting that the preferred target for acquisition will be larger companies with a likelihood that they will be in road freight.
Of course, it is not known which companies DSV would like to buy, however the most obvious location for any such purchase would be in Europe as this is where much of DSV’s road freight business is based. The options for a large purchase in this sector are not limitless, with leading players such as DHL or Kuehne + Nagel unlikely to sell, however the prospect of buying Schenker must have occurred to DSV and there could be other targets as well.
However, DSV already has a presence in US road freight and it might take the opportunity to rebalance its business by an acquisition. There are probably more potential large purchases in North America with the market both growing faster and being more coherent. It would make a further step in DSV becoming one of the world’s leading logistics providers.
Source: Transport Intelligence, October 8, 2019
Author: Thomas Cullen