ACR buy lifts KN into top 3
published: cw 12, 2006 in Mergers & acquisitionsKuehne & Nagel (KN) will complete most of the integration of ACR by the end of this month and is not planning any other major contract logistics acquisitions for at least the next year.
Contract logistics specialist ACR was rebranded as KN this month and the completion of the acquisition takes the company to number three worldwide and in the UK.
Dirk Reich, executive VP for contract logistics, said the company was constantly looking at opportunities and said there would be a number of small announcements, but the only possible major acquisitions by KN would be to strengthen its overland European network. Previously it was ranked around nine or 10 worldwide and number 35 in the UK.
Reich said the rapidity of the integration indicated how good a fit ACR was in the company.
With its strength in France and the UK, the former Hays Logistics now gave KN a strong logistics presence throughout western Europe, he said.
“The two big weaknesses [for KN’s logistics capabilities] were the UK and France, ” he added.
“To offer global logistics, you can’t leave out two markets that are that important.” Reich said integrated solutions ? those that involved a logistics function as well as a freight forwarding component ? were growing faster than any other kind of business.
He estimated this made up around 20% of KN business.
He believed KN’s ability to integrate logistics and forwarding was superior to DHL’s which, since buying Exel, had become the biggest global contract logistics provider.
“DHL has multiple companies per country, ” he said.
“We are definitely better positioned by having this integrated [management] matrix.” He said the purchase of ACR was not a reaction to DHL’s acquisition spree.
Nevertheless, KN was concerned about Deutsche Post and Deutsche Bahn artificially inflating the prices of transport and logistics businesses by using monopoly and state-subsidised money to fund acquisitions such as Exel and Bax Global.
Reich said the ACR acquisition was about increasing opportunities and top-line growth, not about cost-savings, and there would be no job losses or warehouse closures.
KN last week posted strong 2005 figures with turnover up 21.5% to SFr14bn (t9bn) and EBIT up 35% to SFr429m (t274m).
The company said it increased its sea and air freight forwarding volumes at twice the market rate, with sea up 19.4% and air up 9.4%.
Air and ocean made up more than 70% of turnover and Europe contributed 60% of group turnover, the Americas 22% and Asia Pacific 9%.
Source: International Freighting Weekly
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