expects to cut several thousand jobs as it integrates last year’s acquisition of Swiss logistics company Panalpina Welttransport Holding, according to DSV’s finance chief.
The 2019 all-stock transaction by Denmark-based DSV created one of the world’s largest freight-forwarding companies, with operations in more than 90 countries. The deal had an enterprise value of about 5.4 billion Swiss francs ($5.49 billion), DSV said in August, when the transaction closed.
The company expects the Panalpina acquisition to produce about 2.3 billion Danish kroner ($332 million) in cost savings from consolidating operations, logistics facilities, administration and information technology.
Those gains will include reducing headcount by between 3,000 and 4,000, DSV Chief Financial Officer
Jens Lund
said in an interview Thursday.
“It’s down to efficiency,” Mr. Lund said. “Panalpina was still making a small margin, but it was not competitive…Before you can start to grow, you right-size the business. If you don’t have the right structure, then there will be a lot of inefficiency, and you know what? Customers don’t want to pay for that.”
Mr. Lund said the integration, which mostly involves air and ocean freight, should be completed in 2020. “Then we can basically focus on normal operations from 2021 and onwards,” he said.
DSV has grown through a series of acquisitions, including its 2016 purchase of U.S.-based logistics operator UTi Worldwide for $1.35 billion. Layoffs also followed that deal, with DSV reducing headcount by about 3,000, Mr. Lund said.
The combined DSV Panalpina reported 94.7 billion Danish kroner in revenue for fiscal 2019, and 3.7 billion Danish kroner in profit, according to the company’s annual report.
Write to Jennifer Smith at [email protected]
Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
