More mergers and acquisitions on the cards?

Mergers and acquisition
(M&A) activity in the
global transportation
and logistics industry
is expected to soar past the US$73-
billion mark this year, according
to the latest Transport Tracker
report compiled by international
consulting and auditing company,
KPMG.
Steffen Wagner, global chair for
transport and
logistics at KPMG,
pointed out that
business model
convergence and
slower market
growth were
continuing to
drive M&A
activity, although
he does not expect
this year to see
the record levels
achieved in 2015.
“2015 was a
record year for
the transport and logistics sector,
with the value of completed M&A
transactions rising for the third
consecutive year to a total value
of around US$74bn. Additionally,
further transactions worth
approximately US$100bn were
announced, which set M&A activity
in the sector at
a record level in
2015,” he said.
According
to Wagner,
the ongoing
investment
activities in the
transport and
logistics sector
are expected to
remain high.
And KPMG’s
projections
seem to be on
track, with
PricewaterhouseCoopers’ (PwC) data
for the 2016 first quarter global M&A
statistics for this sector showing that
while deal activity declined in Q1, the
value of the deals has increased yearover-
year to US$37.6 billion – over
a quarter (26%) growth on the first
quarter last year.
The PwC report points out that
despite a slight slowing of the growth
of the global economy, it
does continue to grow,
driving the need
for continued
transportation
and logistics
services and
growth, by
means of mergers or
acquisitions, which
continue to be popular.
The South African industry
has been affected by a number of
global acquisitions recently – the
Uti and DSV merger, the HAE
Group acquiring Groupair and
Wisetech Global’s acquisition of
CompuClearing and Core Freight
Systems – but what does the future
hold re M&A activity on a local
front?
If the recently released Barloworld
Logistics supplychainforesight 2016
report is anything to go by, M&A is
rated as a low priority by local and
regional supply chain professionals.
Kate Stubbs,
executive:
marketing at
Barloworld
Logistics, said
that there
was a local
perception that
M&A activity was
costly and full of risk.
“However, companies that are able
to make better use of their resources
through strategic partnerships
and shrewd investments can fasttrack
innovation and outsmart the
competition,” she said.
INSERT & CAPTION
2015 was a record year
for the transport and
logistics sector with the
value of completed M&A
transactions rising for the
third consecutive year.
– Steffen Wagner