NFC eyes up SPD for takeover
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A NEW FORCE could be created in the distribution business if the National Freight Consortium's plans for its first major post-privatisation takeover deal go through. ALAN MILLAR reports.
The NFC confirmed on Monday this week that it has entered into discussions with Unilever with a view to taking over SPD, Unilever's last wholly British transport subsidiary and a distribution specialist.
Talks are at a very early stage and, according to a Unilever spokesman, "very preliminary" discussions between the two parties have established that there is sufficient common ground to consider the plan in more detail.
The workforces of both organisations have been informed, but no time limit has been set. for the conclusion of a deal which would add 2,700 employees and 37 operating bases (including a head office at Watford, Hertfordshire) to the NFC empire.
SPD, which had a 5m turnover last year (within Unilever's world-wide turnover of E14.2bn), operates throughout the United Kingdom. Unilever refuses to divulge details of any of its subsidiaries' profits, but the group made a world-wide profit of £748m last year.
The decision to consider selling SPD is no surprise. Only last week, CM reported that the Tibbett and Britten hanging garment transport subsidiary was sold to a management consortium. It is to be run by SPD's managing director, John Harvey.
Another management consortium bought Carryfast, the former GKN-owned parcels delivery company, from Unilever, and attempts were made in vain earlier this year to sell Norfolk Line, the Anglo-Dutch Unilever unaccompanied trailer/ferry operator which operates through Great Yarmouth.
Heavy restructuring costs were incurred last year in making Unilever's transport companies capable of surviving in current trading conditions, and it has been known for some years that Unilever is unhappy about the performance of its transport companies.
SPD opted over the past year not to buy the surviving Southern England depots of Cory Distribution from the Ocean Transport group, and it would have sat uneasily as the only transport company in a group with much more diverse and successful interests.
For the E500m turnover NFC, SPD would be its first major expansion in Britain. Its bid to merge into a larger consortium with a privatised Sealink shipping group failed in the summer when the Government accepted Sea Containers' bid to buy the shipping line, and other expansions into activities like security equipment (CM, September 15) have been much more modest.
NFC's chairman and chief executive, Sir Peter Thompson, relinquishes his chief executive's role to colleague Jack Mather next month and is expected to devote more time to such strategic planning as company takeovers.
Our Parliamentary correspondent adds: The Labour Party's proposals on economic policy appear to indicate that the National Freight Consortium might not be re-nationalised in its previous form under a Labour Government.
The document, A Future that Works, says that the next Labour administration would extend the frontiers of public enterprise in factors that are vital for the future and would not allow itself to have its priorities dictated by the Tory privatisation programme.
The document does single out British Telecom as a prime example of something that will be re-nationalised.
But equally the document gives a clear indication that will not be the common solution for everything. It refers to initiatives taken by Labour councils as an alternative. "They point the way to the existing and diverse range of forms of public and common ownership that exist, suited to different needs and alternatives," it says.
At a press conference to launch the document, Shadow Chancellor Roy Hattersley reiterated that Labour is not committed to re-nationalise all that has been privatised.