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Ringing the changes
Page 21
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Expect further changes to the logistics market as Swiss-based Kuehne &
Nagel eyes up ACR Logistics. Dominic Perry and Guy Sheppard report.
The European logistics market is set for further upheaval with the proposed acquisition of ACR Logistics by Swiss-based Kuehne & Nagel (K&N). A proposed €490m deal would propel freight forwarding giant K&N into Europe's top five contract logistics providers.
The move comes a month after German Mail group Deutsche Post launched a bid for UK logistics giant Excl. Paris-based ACR, formerly Hays Logistics, has 2.2m2 of warehousing in 11 countries. Its strong presence in areas such as retailing and telecommunications is seen as a neat fit with K&N's operations "ACR Logistics is the ideal partner for the provision of global, integrated logistics solutions to our customers across Europe," says K&N boss Klaus Herms.
Market research specialist Datamonitor describes the deal as almost a necessity if K&N is to remain competitive as an integrated logistics provider: "This acquisi tion will allow K&N to not only enter into a higher margin sector, but to be a top player in the European market."
ACR is particularly strong in the UK, France, Italy and the Benelux countries. It has 15,(100 employees; K&N has 25,000.The deal with ACR's parent, USbased Platinum Equity Group, is likely go through in January.
The logistics market is undergoing yet another round of consolidation as its major players seek to stimulate new growth and provide pan-European networks.
It's a process that has been going on for several years says John Manners-Bell, chief analyst at Transport Intelligence.
The recent flurry of activity Deutsche Post's (DP) provisional acquisition of Exel and Wincanton's capture of Premier Logistics is part of the same trend, says Manners-Bell: "Companies like this have been trying to build their presence in the market for a couple of reasons: Firstly they want to expand geographically into different European markets to better serve their customers, and secondly to build their presence in the contract logistics market."
K&N is primarily a freight forwarder and DP essentially a parcels and post firm. K&N had been looking for an acquisition for some considerable time, with Exel and Wincanton strongly tipped as possible targets, not least because of an existing joint venture between K&N and Wincanton.
The remaining questions in this round of consolidation centre on the only two UK logistics firms still to find buyers: Christian Salvesen and TDG.The two were in ultimately fruitless merger talks last year, but it clearly illustrates they are aware of their position compared with their bigger UK rivals.
"It really conies down to whether they want to be bought or not," says MannersBell. "In the medium term I can't see a future for them operating independently."
Of particular note are the firms on the global stage which have yet to find UK or European partners. Prominent among these are US parcel giants UPS and Fed-Ex which were both linked with European players such as Exel and Dutch postal group (and parent of 'INT)TPCi.
Fed-Ex has since denied any interest in the contract logistics sector, claiming margins are too small. Thisjust leaves UPS,or the intriguing possibility that Wincanton would snap up one of its smaller UK rivals in a bid to at least try to keep pace with DP/Exel. •