Merger & Acquisition: An Analysis of the Underlying Synergies that Formed the Basis for DSV’s Acquisition of Panalpina

Anas Bendali & Dario Jokic

Student thesis: Master thesis


The purpose of this thesis is to examine DSV’s record-breaking acquisition of the Swiss company Panalpina. The former is widely recognized for their ability to deliver successful M&A results after integrating more than 50 companies. It is therefore interesting to see if they will able to repeat the success and most importantly if their assumed synergies of 2,3 bn. DKK are a fair estimate. The research of this paper is built on the basis of two overall perspectives, a literature study and a case study. Through the literature study it was identified that M&A within the 3PL business is highly successful in terms of providing abnormal return for the acquiring company’s shareholders. In addition, the literature study showed signs of superior value creation abilities of cash-payed and hostile M&A activities. As well as the study illuminated that 3PL companies where successful in generating shareholder value in M&A activities in the short run, the similar case was calculated in regards of DSV’s acquisition of Panalpina. The case study was constructed by utilizing a fundamental analysis to challenge the synergy expectation of DSV. Based on the external analysis of the transport and logistic industry it was analysed, that the industry faces several challenges such as the trade war between the US and China, the coronavirus and some customer industries that are in decline. However, a rising e-commerce and sale of pharmaceutical products is an opportunity. The highly competitive industry is under technological revolution where costumers and environmental requirements forces especially the industry leaders to rethink and optimise their business. Several valuable synergies where identified in result of an integration, mainly based on the operating synergy including cross-selling, IT-consolidation and employee reductions. The financial statement analysis indicated a fall in profitability in the acquisition year for DSV and the same can be traced for the acquisition of Panalpina. The experienced management has however historically shown the ability to raise margins above group level subsequently. Based on the strategic and financial analysis, it was determined that the integration of Panalpina result in increased market share in higher profitable market especially within the Air & Sea division. Under the assumption of constant WACC of 7,19%, the thesis estimated yearly synergies of 2,67 bn. DKK, indicating that the DSV expectation of 2,3 bn. DKK is undervalued. Through a Monte Carlo simulation, it was presented, that the synergy estimate greatly varies with the used parameters and assumptions, which highlighted the importance of carefully determining each parameter inputs. Finally, it was concluded with a possibility of appr. 73%, that the synergy expectation is undervalued.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2020
Number of pages156