NFC-Ocean mer er may prompt consoli ations
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0 by Charles Young
Two of Britain s largest freight companies announced plans to merge last week, prompting speculation that more deals like this are in the pipeline. NFC and Ocean plan to
form a £2.75bn group of equal ownership, which will be known as Exel.
John Allan, Ocean's chief executive, says the new venture will serve 68% of the world's top 250 companies. "We know that if we put the two together we would immediately meet the demands of the largest customers and put ourselves ahead of other freight groups." he adds.
Few job losses are expected, although NFC's chief executive Gerry Murphy says he will resign once the merger has gone through. The new group will have up to £1bn to spend on acquisitions and investments, with e-commerce a major focus.
'Whatever savings can be established will immediately be
re-invested in IT." says Allan.
NFC and Ocean's new venture, which has been under consideration for four years, could lead to further consolidation, with Exel as either the predator or the target.
The need to compete, the growth of logistics outsourcing and e-commerce are all seen as factors in this change.
Companies being tipped as predators include US parcels carriers UPS and Federal Express as well as DHL. Tibbett Britten and Hays Logistics are seen as potential predators or targets.
The remaining companies with logistics revenues over S2bn include Deutsche Post. Consolidated National Freightways in the US and Kuehne & Nagel in Switzerland.