18 October 2007 | Paul Snell
The acquisition of a UK logistics firm is expected to create large cost savings for the French company buying it.
Norbert Dentressangle (ND) has offered to buy Christian Salvesen in a £254 million deal. The offer has been recommended by the Salvesen board and is awaiting the approval of the firm's shareholders.
ND believes the deal could save ?25 million (£17.3 million) by 2010 through better purchasing, reduced back office costs and improved IT systems.
A spokesman for ND said a bigger group would have more buying power, making it able to get better deals on its large vehicle and IT spend. But neither company would give details of the effects the deal could have on their buying teams.
Geoff Dosseter, external affairs director at the Freight Transport Association, was not surprised by the merger. "This is not a new trend. This is the long-term impact of many years growth in the third-party logistics sector."
The takeover would create a supplier with more than 29,000 employees and estimated sales of ?2.9 billion (£2 billion). It would also boost ND's operation in the UK, Benelux, Spain and Portugal, where Salvesen is strong.
Dosseter added buyers should not be worried about a limited number of suppliers in the market. "It does reduce the amount of choice for customers, but there are a fairly large number of third-party logistics providers."
Smaller firms are pleased with the plan. Philip Stephenson, joint managing director of freight firm Davies Turner, said: "The bigger the multinationals become the better, as they leave business openings they cannot take on but which we can move into."