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CONSOLIDATION in the forwarding sector is accelerating with Denmark’s DSV Group US$1.35 billion takeover bid of Long Beach-based UTi Worldwide.

The latest move comes after GEFCO bought IJS Global, Geodis bought OHL and XPO acquired both Con-way in the US and Norbert Dentressangle in France.

UTi is a global, supply chain services and logistics company with revenue of $3.9 billion and 21,000 employees in 58 countries, notes London’s Air Cargo News.

“The combined company will be one of the world’s strongest transport and logistics networks,” the companies said in a joint statement.
The boards of directors of DSV and UTi unanimously approved the transaction. DSV will use equity financing, in the level of DKK5 billion (US$760.8 million) during the next 12 months, to “maintain a prudent capital structure”.

“We complement each other perfectly, both in terms of business activities and geography,” said DSV chairman Kurt Larsen.
“Together, we will be even stronger and able to capitalise on business synergies as well as a greater global reach to the benefit of shareholders, customers and employees,” he said.

Said UTi chairman Roger MacFarlane: “We are in an industry where scale is critical. Joining forces delivers greater client value and opportunities for our people while financially attractive for shareholders.”

The combined companies will have a more balanced geographical revenue base with 61 per cent from Europe, Middle East and North Africa, 17 per cent from the Americas, 16 per cent from Asia-Pacific and six per cent from sub-Saharan Africa.

UTi has revenues of $3.9 billion and 21,000 employees in 58 countries. UTi has struggled financially in recent years and has been undergoing restructuring to turn around recent loss-making, reports Lloyd’s Loading List.

DSV said the combined company would operate “one of the world’s strongest transport and logistics networks”.
The transaction is expected to close in Q1 2016. Following the merger, UTi will become an indirect wholly owned subsidiary of DSV.