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M&A in the Italian transportation market

M&A in the Italian transportation and forwarding market will continue to occur. If one looks at the changing patterns in the fashion industry which is very important for Italy it is clear that the transportation and forwarding market will adapt to this. M&A is an alternative for larger buyers to improve its position an create synergies. In 2011 the Italian road & rail transportation market grew by 6.5% to reach a value of $60 billion. The industry is forecast to have a value of $85 billion in 2016, an increase of 42.3% since 2011. Rail freight is a small segment accounting for 1.2% of the market value which is lead by road freight accounting for 98.8%. Italy accounts for 12.7% of the European road & rail transportation market value. France is leader of the European market with 16.1%, Germany is second with 15%.

Earning capacity in road transportation

Road and rail can be substitutes for each other, as the rail network is not very developed in Italy its treat is weak. 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 Italian 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. The road transportation segment is still very fragmented in Italy, hence M&A activity can be expected.

M&A by leading companies in road and rail transportation

Some companies that have performed M&A related activity and are important companies in road and rail freight are;

  • Bartolini Express Courier
  • Deutsche Post DHL
  • PostNL N.V.
  • Trenitalia
  • Bartolini Express Courier

Bartolini Express Courier is a privately owned Italian freight operator specializing in the delivery of shipments and logistical support. Bartolini operates 1,050 branches in Europe of which around 170 are in Italy and employs 14,000 people. The company runs a fleet of 6,500 vehicles that serve customers in over 200 countries. Bartolini delivers over 125 million parcels a year and employs 14,000 people.

M&A activity Deutsche Post DHL

In May 2011 DHL Supply Chain has acquired Eurodifarm Srl from Wisequity II & Macchine Italia, a fund managed by private equity firm Wise SGR S.p.A. Eurodifarm is an Italian provider of air and road freight transportation pharmaceuticals and temperature controlled products.

Other M&A deals of Deutsche post DHL are; the acquisition of Standard Forwarding (US 2011), the sale of the Exel corporation (US 2011), the sale of the French road day-definite parcel delivery business (2010).

M&A activity PostNL

On April 2011 TNT N.V. made a M&A deal with management and private equity firm NPM Capital N.V. by the sale of its unaddressed mail business in Italy, RSM Italy S.p.A (formerly H-Audit, Ltd.). Both TNT and NPM Capital are based in the Netherlands. Other Italian M&A deals include; The sale of Spedimac (2008), acquisition of TWM Italia (2006). In 2011 TNT sold De Belgische Distributiedienst and the General Meeting of Shareholders of TNT N.V. approved the demerger of the Express business. TNT N.V.’s statutory name was changed into PostNL N.V.

M&A deals Trenitalia

On February 2011 Gruppo Ferrovie dello Stato SpA and Cube Infrastructure Fund acquired Arriva Deutschland GmbH from Deutsche Bahn AG. Trenitalia is mainly engaged in providing transportation of passengers, freight and logistic activities. The company operates through 3 business divisions: Passengers, Regional Passengers and Cargo. Trenitalia is a wholly-owned subsidiary of Ferrovie dello Stato and employs 87.000 workers. The company has a rail network of almost 16,500 kilometers.

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