Panalpina explore alternatives with Agility

Agility

The Ernst Göhner Foundation appears to be determined to retain its grip on Panalpina. That at least is the initial impression from the reports that a merger between Kuwaiti-owned Agility Logistics and Panalpina is being considered. It is very unclear what such a deal would look like. A statement issued by Agility on Friday simply said that it was “currently in preliminary discussions with the Swiss-based global forwarder, Panalpina, on partnership opportunities between the logistics businesses of the two companies. At this stage, no agreement has yet been reached between the two companies. Agility will disclose any material development in this matter if and when it occurs.”

In the meantime, DSV has upped its offer for Panalpina. On Thursday the Danish company said that it was now to offer CHF 180 (€158) per Panalpina share which is an improvement on the mix of cash and DSV shares that valued each Panalpina share at an estimated CHF 170 (€150).

The situation is complicated by the fact that significant shareholders have been voluble in supporting the DSV bid, with Artisan Partners, owners of 12% of the equity of Panalpina publishing a statement describing the offer as deserving “serious and impartial consideration.” This strongly implies that it’s the Ernst Göhner foundation is not impartial and it is this that is driving the approach to Agility.

The relationship with Agility is not one that is entirely expected. The Kuwaiti company has evolved to become a freight forwarding business of some size, however its synergies with Panalpina are not immediately obvious. With the major exception of Agility’s leading presence in the Middle East, the two companies have fairly similar geographical market exposure. Both also have useful forwarding activity in oil and gas. Agility’s contract logistics business is possibly stronger than that of Panalpina’s but is it hard to tell. Certainly, Agility has traditionally had a strong exposure to emerging markets such as Africa and Central Asia, but then again so has Panalpina.

Possibly one driver of collaboration is that Agility has a strong Swiss presence, having bought a Swiss forwarder a number of years ago. This may have brought the two together. However, the timing clearly implies that the dominant motivation is a need to repel the DSV offer.

There are further possibilities. It has long been suggested that Kuehne and Nagel may bid for Panalpina, however its Chairman, Klaus-Michael Kuehne has loudly asserted that even the first price offered by DSV was too high, so a counter-bid may not materialise from this source. Equally, the Ernst Göhner Foundation may be just pursuing a very aggressive strategy designed to maximise the price of their assets. However, the fact remains that owning 46% of the equity, the Foundation remains in the driving seat. 

Source: Transport Intelligence, February 18, 2019

Author: Thomas Cullen

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