XPO Logistics completes acquisition of K+ N assets in UK/Ireland

Purchase encompasses Swiss group’s contract logistics operations in the beverage, technology, e-commerce and food service verticals. XPO Logistics has completed its previously announced acquisition of the majority of Kuehne + Nagel’s contract logistics operations in the UK and Ireland.

“We’re pleased to complete the Kuehne + Nagel acquisition and welcome these prestigious new customers and talented colleagues to XPO. We look forward to the new opportunities that have been created by the combined resources of our larger organization,” said CEO, Europe,  Malcolm Wilson.

The transaction was first announced in March last year and the assets relinquished by K+N  generated a turnover of approximately CHF 750 million in 2019 and are supported by 7,500 employees.

It expands XPO’s contract logistics network in the UK and Ireland to 248 locations and approximately 26,000 employees. The acquired operations provide a range of logistics services, including inbound and outbound distribution, reverse logistics management and inventory management, primarily in the beverage, technology and e-commerce, and food service verticals.

For its part, Kuehne+Nagel noted that in finalising the divestment of a major part of its UK Contract Logistics portfolio to XPO Logistics, it has completed the restructuring of this business unit.

“This transaction follows the sale of the Contract Logistics activities in Argentina, the chilled FMCG portfolio in France as well as a portfolio of real estate assets. The UK transaction closes after the unconditional approval by the British Competition and Market Authority. The scope includes the drinks logistics, food services and retail & technology businesses. Kuehne+Nagel remains highly committed to excellent customer solutions and service in the UK,” it said in a statement.

Joerg Wolle, chairman of Kuehne + Nagel International AG, commented: “We initiated the strategic review of our Contract Logistics activities in the Board of Directors in early 2019 and informed our business partners and the public accordingly. With the divestment of parts of our contract logistics business in the UK, the focused, comprehensive restructuring process was successfully completed. The business unit is now well positioned to concentrate on scalable solutions worldwide, particularly in the e-commerce and pharmaceutical sectors.”

In a separate development, at the beginning of last month, XPO Logistics announced plans to completely separate its North American freight transport business from its contract logistics activities, with the two units set to become separate companies traded independently on the New York Stock Exchange.

Ending months of uncertainty and speculation about the future structure and direction of its activities, the group’s board of directors“unanimously approved a plan to pursue a spin-off of 100% of its logistics segment as a separate publicly traded company;”

Although the company highlighted a number of claimed benefits for its customers, a key factor has been the group’s desire to maximise its share price and stock market valuation.

XPO said that “after a thorough examination of all strategic alternatives, the XPO board currently believes that the optimal path to unlock aggregate equity value is to create two independent companies that are each well-equipped to capitalise on secular growth trends in their sectors.”.

Source: Lloyd’s