Nippon Express, the seventh-largest third-party logistics provider in the world by gross revenue, has agreed to acquire Austrian logistics company Cargo-Partner for up to $1.5 billion, advancing its strategy to become a global mega-freight forwarder.
The deal announced Friday significantly strengthens Nippon Express Group’s network in Europe, especially the growing manufacturing regions in central and eastern countries, and increases its ocean and air forwarding volumes. Greater access to Europe and other regions provides a counterbalance to projections for Japan’s domestic logistics market to remain stagnant due to a shrinking population and government policies.
Publicly listed Nippon Express said it will pay 845 million euros ($924 million) in cash for Cargo-Partner and its subsidiaries, followed by cash payments of up to $607 million based on the target companies reaching certain financial thresholds. The deal is expected to close between November and May, subject to various regulatory approvals.
Nippon Express’ gross revenue was more than $21 billion last year, with 29% of business coming from overseas sales compared to 20% in 2019. The company, which has more than 73,400 employees at 760 locations, forecasts revenue will decline to $18 billion this year amid a global economic slowdown and weak shipping demand, with international sales increasing to 30%. It is targeting an overseas sales ratio of 40% by 2028, with half of sales from outside Japan by 2037.
Management-owned Cargo-Partner, which is celebrating its 40th anniversary, has 4,000 employees in 40 countries, including the United States. In 2022, it generated $2.2 billion in gross revenue, more than double its sales two years earlier, with operating income of $77.6 million. In addition to primary forwarding business, Cargo-Partner also arranges intermodal rail shipping and provides warehousing services.
It will continue to operate under its own brand within Nippon Express.
The acquisition of Cargo-Partner strengthens Nippon Express’ ability to provide a suite of logistics services between Asia and Europe.
The combination gives both companies greater global office coverage, specialty services, information technology resources and global scale, with Cargo-Partner gaining a considerable presence in the intra-Asia and trans-Pacific markets. Nippon Express and Cargo-Partner said the transaction is complementary because of their different customer bases and geographic strongholds.
Tokyo-based Nippon Express in January acquired two freight forwarders based in Italy. In 2020 it bought U.S.-based MD Logistics, a pharmaceutical industry specialist.
Nippon Express moved 870,000 tons of cargo by air in 2022, making it the seventh-largest air freight forwarder by volume. It envisions becoming No. 2 in the world, after Kuehne+Nagel, by 2037. Nippon Express and Cargo-Partner combined would vault to No. 11 in rank among ocean freight agents, according to research by Armstrong & Associates and Transport Topics.
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Source: https://finance.yahoo.com/news/nippon-express-buys-european-logistics-205111249.html