We see sales of transportation companies in the German market due to retirement and expect further consolidation and hence M&A activity over the next years. Although the larger transportation companies have already acquired a significant number of privately owned companies we think further M&A will occur. Being able to deliver road transportation at low prices is crucial and hence scale (and cheap financing possibilities) is an important driver to compete. The German road & rail industry shrank by 1.3% in 2011 to reach a value of $71 billion although the volume grew by 2.7%. Forecast for 2016 shows an increase of the value to $80 billion, which means the compound annual growth rate of the industry in the period 2011–16 is predicted to be 2.6%. The German road freight segment accounts 93,7% of the total market value. Germany accounts for 15% of the European road & rail transportation market value. France is leader of the European market with 16,1%, Italy is third with 12,7%.
Road and rail can be substitutes for each other. Buyer power can be considered as moderate, large buyers can integrate backwards by establishing their own fleet. Buyer power is reduced by the large variety of potential customers, coupled with the importance of services offered within the industry Barriers of entry are low as everyone can buy a used truck and start a transportation company. Main inputs are fuel and vehicles, supplier power can be considered as moderate. Rivalry can be considered as very strong as the segment contains a large number of players with limited possibilities to differentiate the product. Despite challenging market conditions, the German road and rail market is forecast to grow over the coming years. This should alleviate rivalry somewhat. The large variety of potential customers, coupled with the importance of services offered within the industry, reduces buyer power significantly.
Some companies that have performed M&A related activity and are important companies in road and rail freight are:
On February 2011 DACHSER has established a joint venture with Jonen Freight (Pty) Ltd, a South Africa-based independent freight company. The M&A transaction will help DACHSER to expand its intercontinental network in South Africa and the activities in the Dachser Air & Sea Logistics business segment will be strengthened.
On April 2010 JA Leach Transport Limited, a UK-based provider of transport, haulage, storage, distribution, warehousing, supply chain solutions and freight forwarding was acquired by Dachser.
On August 2009 the company sold Haugsted AirCargo Services, a Denmark-based provider of trucking and handling services, to airlines to Wallenborn Transports SA, a Luxembourg-based logistics business.
Dachser GmbH & Co. KG (Dachser) is a provider of logistics services. The company is engaged in providing its logistics services across a pan-European network, using land, air and sea routes. It also provides information logistics, contract logistics, chemical logistics, and DIY (do it yourself) logistics. The company reported annual sales of around €3.2 billion (approximately $4.2 billion).
The company mainly operates through three business segments: European logistics, food logistics, and air and sea logistics. The European logistics segment offers solutions such as Entargo for the transportation of cargo. Dachser's food logistics segment provides temperature-controlled logistics services. The temperature-controlled network includes more than 85 company owned and partner locations in Europe. The air and sea freight logistics segment offers various logistics services such as global freight consulting, sea and air freight services, door-to-door services, high departure frequencies with fixed capacities, value-added services, and customs clearance.
On March 2011 DB Vertrieb GmbH (trading as start.de) was sold to SoQuero GmbH, a subsidiary of Intershop Communications AG. All the companies involved in the transaction are based in Germany.
On February 2011 Gruppo Ferrovie dello Stato SpA, based in Italy, and Cube Infrastructure Fund acquired Arriva Deutschland GmbH from Deutsche Bahn AG.
Deutsche Bahn (DB) is an international transport and logistics services provider. Deutsche Bahn has operations through 860 subsidiaries located in 130 countries. In Germany DB operates through 169 subsidiaries. The company recorded revenues of $46 billion in the fiscal year ending December 2010, an increase of 17% compared to fiscal 2009.
The company operates through ten business segments: DB Bahn long-distance, DB regional, DB urban, DB Arriva, DB Schenker rail, DB Schenker logistics, DB Netze track, DB Netze stations, DB services and subsidiaries. The company operates 27.000 trains and 5.000 freight trains per day. It carried 415 million tons of rail freight; 80.8 million shipments to European land transport; 1.6 million twenty-foot equivalent units (TEU) of ocean freight; and 1.2 million tons of air freight. Further, it managed a fleet of 106,000 vehicles and 7,000 bikes.
In June 2011 DHL International GmBH acquired Standard Forwarding, a US-based freight transportation services provider. Other M&A activity includes the sale of the Exel corporation (US 2011), the sale of the French road day-definite parcel delivery business (2010).
Deutsche Post DHL offers comprehensive services in international express, air and ocean freight, road and rail transportation and contract logistics. The company operates through four divisions: global freight forwarding, mail, supply chain and express. The company recorded a revenue of $68 billion in the fiscal year ending December 2010.
The global freight forwarding division is engaged in transportation by rail, road, air and sea in more than 150 countries. It is the world's largest provider of air and ocean freight services. Deutsche Post DHL is one of the leading overland freight forwarders in Europe and the Middle East. The supply chain division specializes in contract logistics and provides warehousing and ground-based transport services as well as sector-based value-added services along the entire supply chain. The express division offers national and international courier, express and parcel (CEP) services under the DHL brand.
Please let us know your opinion on the M&A (mergers and acquisition) activity in Germany. What do you see happening?
adah | Monday 23 February 2015 | website: www.fgi.uk.com
In 2014 German M&A activity dropped by 17.6%, compared to 2013. Record total deal count for the year with 798 transactions. United States (US) of high importance for inbound and outbound activity. By value, Industrials & Chemicals remained the most active industry, TMT sector market share low. 6th German M&A and Private Equity Forum on March 18-19, 2015 in Düsseldorf