Zurich - Danish logistics group DSV A/S sweetened its offer for Panalpina to $4.3 billion, with a tug of war escalating on Friday over the Swiss company as it weighs a separate deal with Kuwait’s Agility Group.
DSV raised its bid for Panalpina to 180 Swiss francs per share in cash last week from the previous cash-and-shares offer worth around 170 francs, the Danish company said.
DSV went public with its raised offer after Panalpina and Agility Group announced a possible tie-up. This could include the Swiss company purchasing Agility’s logistics business and the Middle Eastern group taking a stake in Panalpina, sources familiar with the discussions told Reuters.
The 20 largest freight forwarders control just a third of the market, making the industry ripe for takeovers or partnerships as companies look for ways to improve profitability and take advantage of economies of scale. “The revised all-cash offer was made in response to feedback received from Panalpina and included certain commitments to be specified toward Panalpina’s employees and the Panalpina heritage,” DSV said. Freight forwarders coordinate much of global trade, organizing shipments on aircraft, ships and trucks.
Panalpina’s biggest shareholder, the Ernst Goehner Foundation with about 46 percent of the shares, had opposed the original DSV offer, saying it wants the Swiss company to be a freight-forwarding industry consolidator, not prey for a rival.
The Zug, Switzerland-based foundation declined comment on the new DSV offer or the Agility talks. Agility — with 22,000 employees and $4.6 billion in annual revenue, about $3.5 billion coming from logistics — has been expanding globally under managing director Tarek Sultan.