DSV Eyes CH Robinson's Global Freight Dvision

Reuters recently reported that sources have revealed that Danish freight forwarder DSV is interested in acquiring the global freight forwarding business of its rival U.S. freight forwarder C.H. Robinson for a price that could be as high as $9 billion.

DSV is reportedly looking to expand its business in North America and met with a number of investors in early June to reveal its willingness to make such an acquisition, thereby "gaining key access to the trans-Pacific trading market.

The sources also said DSV is not interested in acquiring the entire C.H. Robinson company and has no plans to acquire C.H. Robinson's freight brokerage business.

Neither DSV nor C.H. Robinson responded to the news.

C.H. Robinson is known to have an enterprise value of $13 billion and has two core businesses, global freight forwarding and freight brokerage.

C.H. Robinson's global freight forwarding business is performing significantly better than its freight brokerage business. While contract trucking rates struggled to keep up with the busy spot market due to the epidemic, high demand for ocean and air freight pushed the company's freight volumes to new highs.

In 2021, C.H. Robinson's global freight forwarding business generated revenues of $6.7 billion. in the first quarter of 2022, revenues reached $2.2 billion, up 89.8% year-over-year. This was driven by strong market demand and tight capacity supply, which drove significant growth in freight rates. In addition, revenue growth was driven by an increase in C.H. Robinson's market share.

DSV, on the other hand, has an enterprise value of DKK 239 billion (about USD 34 billion) and has long wanted to expand its North American business. DSV has said that it hopes to achieve solid growth in a highly competitive global logistics market through consolidation and acquisitions.

DSV has always been the "acquisition maniac" in the international freight forwarding market, and in recent years it has been making big moves. These include the acquisition of Agility's GLobal Integrated Logistics, GIL for $4.2 billion in 2021 and Panalpina for more than $5 billion in 2019.

A spokesperson for DSV said that M&A is an important part of DSV's strategy. The company rewards its shareholders by focusing on the market and playing an active role in the continued consolidation of the industry. As such, DSV will review potential acquisition opportunities.

According to the 2022 Top 50 Global Ocean and Air Freight Forwarders list published by Transport Topics, a leading magazine for the logistics industry, DSV is ranked No. 4 for ocean freight forwarders and No. 3 for air freight forwarders in 2022; C.H. Robinson is ranked No. 7 for ocean freight forwarders and No. 20 for air freight forwarders.