Monday (19/8/2019) saw the conclusion of DSV’s purchase of Panalpina Welttransport (Holding) AG. A new company will be officially created after an Extraordinary General Meeting and will be called ‘DSV Panalpina A/S’. It will be one of the world’s largest freight forwarders (Ti’s Global Freight Forwarding 2019 reports shows that it will become the third biggest by revenue).
At times during the negotiations between DSV and Panalpina it has been unclear whether the result is a merger or a takeover, however with the management of the new company dominated by DSV’s Danish managers, the process appears to be very much one where DSV is changing its name and absorbing Panalpina, rather than the creation of a new company structure and culture.
Confusingly, whilst Panalpina remains a legal entity DSV has filled-up its senior management and board with its own people, notably with Jens Bjørn Andersen as the CEO and Jens H. Lund as the CFO. The company board is dominated by DSV managers with the former Panalpina senior managers, Stefan Karlen and Robert Erni, moved to the new company’s integration committee.
Importantly DSV said that these changes give them “full control over Panalpina” whilst the process of operational integration takes place. So, it appears the new company will be very much like the old DSV.
In terms of integration Jens Born Andersen, DSV’s and now, Panalpina’s CEO, said that the company would look to mainly use DSV’s IT systems which he said were highly productive whilst Panalpina had been on a “journey with its productivity” with their system. This issue of productivity will be central to the rationale of the deal. Mr Andersen also commented that there was not the same sense of urgency in integrating Panalpina as there was with its previous purchase, UTi, which he described as a “rescue mission” and that comparing the condition of Panalpina with that of UTi before DSV took it over “would be highly wrong”.
What DSV aspires to do with Panalpina’s underlying businesses is to run them better. As Mr Andersen commented about the IT integration, DSV clearly believes that productivity at the Panalpina operations can be improved and this is the primary focus for increasing profits. Expanding sales is second to this, although DSV appears to be pleased about Panalpina’s list of customers and clearly hopes to gain business for its road freight and contract logistics divisions.
Judging by the first day of DSV Panalpina, its prospects look good. DSV’s management appear to have a strong grip on the company and their record in integrating acquisitions is excellent. This suggest that better results in forwarding especially will appear quite quickly.
Source: Transport Intelligence, August 20, 2019
Author: Thomas Cullen