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Robert.Jervis_43227 Jan 04

Kuehne+Nagel completes Contract Logistics restructuring

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Divestment of major part of the UK Contract Logistics portfolio successfully completed
With the completed divestment of a major part of its UK Contract Logistics portfolio to XPO Logistics, Kuehne+Nagel 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.
 
Dr. Joerg Wolle, Chairman of Kuehne + Nagel International AG, says:

"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."

Malcolm Wilson, XPO Logistics chief executive officer for Europe, said:

“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 organisation.”
 
The transaction 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.

Essentially what has happened is that the old Hays Logistics business, that K+N bought in 2005, is being merged with the TDG businesses that Nobert Dentressangle and later XPO bought in 2010.

As for XPO Logistics, it may have strengthened its market position in the UK but will transform its strategic position later this year by splitting into two separate companies. The contract logistics business will become ‘NewCo’, which will include both the North American and European businesses. This business will be sizeable, with XPO Logistics claiming that it will be the “second-largest contract logistics provider in the world”.

What the trajectory of this ‘NewCo’ will be is unclear. It could continue to acquire contract logistics businesses, although it would seem unnecessary bearing in mind the size of the new company. What it does represent is a consolidation of the contract logistics sector

Sources: K+N, XPO & Transport Intelligence