Consolidation in shipping continues as DP World acquires Unifeeder
Port operator DP World is upping its presence in the global supply chain by buying Unifeeder Group for €660 million
DP World’s acquisition of 100% of Unifeeder for €660 million marks out another step in the consolidation for the shipping industry, although this time instead of an alliance between shippers it is a port operator bulking up.
Based in Aarhus (Denmark), Unifeeder is Europe’s largest container feeder operator and, according to Alphaliner, the 30th largest container shipper in the world. Unifeeeder serves both deep-sea container hubs and the intra-Europe container freight market. The Group reported revenue of €510 million in 2017.
Based in Aarhus (Denmark), Unifeeder operates the largest and most densely connected common user container feeder and an important and growing shortsea network in Europe, serving both deep-sea container hubs and the intra-Europe container freight market. The Group reported revenue of €510 million in 2017 and EBIT margins in line with other asset-light logistics operators. It operates approximately 60 chartered vessels.
DP World on the other hand is a terminal operator and has ambitions beyond its Middle Eastern routes. In July 2018 it announced plans to build a logistics hub in Mali. DP World’s main business marks the acquisition out as being of note as potentially a marker of greater integration in supply chains between ports and shippers.
Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said: “The ever-growing deployment of ultra-large container vessels has made high-quality connectivity from hub terminals crucial for our customers and Unifeeder is a best-in-class logistics provider in this space with a strong reputation in Europe. Our aim is to leverage on the in-house expertise of Unifeeder and to accelerate growth in this scalable platform to deliver value for all stakeholders. Unifeeder operates on the same common-user principle as DP World and adds to the Group’s strong value proposition to international shipping lines and end cargo owners in making the global supply chain more efficient and cost effective.”
DP World is buying the shipper from private equity firm Nordic Capital Fund VIII and certain minority shareholders.
The acquisition is subject to regulatory approvals and expected to be earnings accretive in the first full year after completion. It will be financed from existing balance sheet resources and is expected to close in 4Q 2018.