GXO is set to buy Clipper Logistics in a move which sees the US logistics giant ramp up its acquisition drive in the UK and turbo-charge consolidation in the UK logistics market.

Announcing the offer in a joint statement, Clipper Logistics and US-listed GXO said the deal would create a “compelling strategic combination which significantly increases the opportunities for both businesses in the high-growth e-commerce/e-fulfilment areas.”

It added that the two logistics companies are “natural partners with a very strong cultural fit” with GXO “committed to protect and build on Clipper's entrepreneurial approach” and to “safeguard Clipper’s existing employment rights”, including the pension rights of Clipper employees.

GXO’s proposal, which the board of Clipper has confirmed they are “minded” to recommend to shareholders, values Clipper at £943m.

If the purchase goes ahead GXO will pay 690p in cash and issue 230p of new GXO stock for each Clipper share, representing a 32% premium to Clipper’s three-month average share price.

The offer follows unprecedented growth at Leeds-based Clipper Logistics, boosted by retail customers’ online sales during the Covid-19 pandemic lockdown, which outstripped Black Friday levels by 100% in 2020.

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In its latest annual results to 30 April 2021, Clipper Logistics reported a turnover of £696.2m and pre-tax profit of £21.7m.

Clipper Logistics founder Steve Parkin, a former coal miner who set up the company in 1992 with one truck, stands to reap a £104m pay out and shares in GXO if the deal goes ahead. Last year he sold a 10% shareholding for around £62m.

GXO, which was spun off from XPO Logistics last year, specialises in warehousing and picking, packing and distributing goods for blue chip customers including Nestlé, Apple and Nike.

Last year GXO reported $7.9bn in revenues, making it one of the world’s largest contract logistics providers.

This latest acquisition, if it goes ahead, will be GXO’s second purchase of a logistics business in the UK. In 2020, whilst still under the XPO brand, it bought the UK drinks logistics, food services and retail and technology divisions of Kuehne+Nagel.

Announcing the offer, GXO’s chief executive Malcolm Wilson said: “This potential acquisition would enhance GXO’s position as a successful pure-play logistics leader.

“Our two companies have highly complementary service offerings, customer portfolios, and footprints in the UK and Europe.”