European freight forwarder Geodis has recently acquired TNT's freight forwarding division, TNT Freight Management (TFM), for EUR460 million (US$590.3 million). Pending the approval of European competition authorities, the combined new entity will have a total revenue of EUR4.4 billion (US$5.65 billion), based on 2005 figures, and employ 26,000 staff around the world.
The acquisition of TFM is expected to double Geodis' revenue from freight forwarding to about EUR1.6 billion ($2.05 billion). This would account for more than one third of Geodis' total revenue and rank the group among the top 10 freight forwarders globally, a company statement said.
"This transaction, made possible by our capital structure, which we have made healthy after six years of work, is in line with our international development strategy of expanding in activities of strong growth," said Pierre Blayau, chairman and CEO of the Geodis group. "Freight forwarding is an increasingly important activity in transport and logistics. Our new critical mass makes us more competitive and better positioned to serve our clients." Geodis estimates that integration costs, which would mainly be incurred next year, would be in the range of EUR25-30 million. Expected synergies represent approximately EUR35 million per year, of which a significant portion is expected to impact the results of 2008, the Geodis release said. The acquisition will be financed through a syndicated loan arranged and underwritten by BNP Paribas, some of which will bridge a rights issue of approximately EUR150 million. The rights issue should be launched in the second quarter of 2007, subject to market conditions. SNCF Participations has already indicated its intention to subscribe to the rights issue pro rata to its 43.3 per cent shareholding in Geodis. TNT Freight Management, formerly known as Wilson Logistics, recorded a net revenue of EUR782 million for 2005 generated through a network of offices, covering the Americas, Asia/Pacific, Scandinavia, Europe and the Middle East.
The acquisition of TFM is expected to double Geodis' revenue from freight forwarding to about EUR1.6 billion ($2.05 billion). This would account for more than one third of Geodis' total revenue and rank the group among the top 10 freight forwarders globally, a company statement said.
"This transaction, made possible by our capital structure, which we have made healthy after six years of work, is in line with our international development strategy of expanding in activities of strong growth," said Pierre Blayau, chairman and CEO of the Geodis group. "Freight forwarding is an increasingly important activity in transport and logistics. Our new critical mass makes us more competitive and better positioned to serve our clients." Geodis estimates that integration costs, which would mainly be incurred next year, would be in the range of EUR25-30 million. Expected synergies represent approximately EUR35 million per year, of which a significant portion is expected to impact the results of 2008, the Geodis release said. The acquisition will be financed through a syndicated loan arranged and underwritten by BNP Paribas, some of which will bridge a rights issue of approximately EUR150 million. The rights issue should be launched in the second quarter of 2007, subject to market conditions. SNCF Participations has already indicated its intention to subscribe to the rights issue pro rata to its 43.3 per cent shareholding in Geodis. TNT Freight Management, formerly known as Wilson Logistics, recorded a net revenue of EUR782 million for 2005 generated through a network of offices, covering the Americas, Asia/Pacific, Scandinavia, Europe and the Middle East.