Global logistics provider DSV is to acquire Swiss rival Panalpina in a £3.51bn deal that will create the world’s fourth largest logistics company behind Deutsche Post DHL, Kuehne+Nagel and DB Schenker.

Panalpina's board has agreed to a revised offer described by chairman Peter Uber described as “very attractive.” The Panalpina board has recommended the deal to its shareholders.

The acquisition will create a company with a revenue of around £13.55bn and  a workforce of 60,000 employees in 90 countries.

DSV is also proposing to change its name to DSV Panalpina once the deal is completed.

The purchase of Panalpina follows an attempt by DSV to buy CEVA Logistics just six months ago, which it abandoned after receiving what DSV described as a “lukewarm response” to its offer.

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DSV chairman Kurt Larsen said: “A combination of DSV and Panalpina further strengthens our position as a leading global freight forwarding company.

“Together, we can present a strong global network and enhanced service offering to our clients, further solidifying our competitive edge in the industry.

“It’s a great match on all parameters. Panalpina is a great company and we’re very excited by the possibility to join forces and to welcome Panalpina’s talented staff”.

Joining forces

Panalpina chairman Peter Ulber said: “In the course of the past weeks, Panalpina’s board of directors and management have been exploring different strategic initiatives and held discussions with DSV about a potential combination.

“The board of directors’ assessment is that the updated proposal of DSV is very attractive. We are now looking forward to joining forces with DSV and contributing to creating, one of the world’s largest transport and logistics companies."

Whereas Panalpina is mainly focused on air and sea freight, DSV’s business is broader, operating air freight, sea freight, road freight and contract logistics divisions. The company’s road freight and contract logistics arms generate 26% and 14% of revenue respectively.

David Kerstens, equity analyst at Jeffries International, said the deal could see some operations combined to cut costs.

“DSV is targeting commercial synergies, from cross-selling based on a stronger network and improved service offering, improving Panalpina's yields, as well as cost synergies, from the consolidation of operations, administration, facilities and the IT infrastructure,” he said.