Norbert Dentressangle brand to disappear after $3.53 billion takeover
The American transportation company XPO Logistics Inc, one of the fastest growing providers of transportation logistics services in North America, has acquired the market leading family firm of Norbert Dentressangle, based in Lyon, France. As a result the highly recognisable red livery on the company’s trucks, much collected in miniature by children, will disappear from European roads as the merged company is united under the XPO Logistics brand. The company’s founder, 61 year old Norbert Dentressangle (pictured) will sell his family's 67 percent stake for €217.50 ($239) per share, a 34 percent premium to the stock's close on Monday. XPO will launch a tender offer for the remaining shares at the same price. After the announcement XPO’s shares rose by twelve percent.
Norbert Dentressangle is considerably larger than XPO, which now expects grow from its current scale of 201 locations and approximately 10,000 employees to approximately 52,350 employees at 863 locations in 27 countries. XPO intends to make substantial investments in the growth of its acquired European operations, in part through the application of technology. It expects its combined annual spend on technology to be approximately $225 million following completion of the acquisition.
The transaction will create a top ten worldwide contract logistics company based on combined revenue and 129 million square feet of facility space, says XPO. Most of the facilities are leased and dedicated to high-value-added warehousing operations, including cold chain and reverse logistics. Norbert Dentressangle’s €2.6 billion contract logistics business has deep customer relationships as evidenced by a 97 percent customer renewal rate. Approximately 26 percent of contract logistics revenues are generated in the United States.
Norbert Dentressangle’s CEO Hervé Montjotin, who will serve as chief executive officer of XPO’s European business and president of the parent company, said: “By joining XPO, we will become part of an organisation that shares the ambition that has guided us since the creation of Norbert Dentressangle 36 years ago: to become a global partner able to effectively support our customers in the management of their supply chains.”
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said: “In Norbert Dentressangle, we are acquiring a company that has been meticulously built over the last four decades.” This is a defining moment in the growth of XPO, he added. “Our planned acquisition of Norbert Dentressangle will catapult XPO to a top ten global logistics company. It will more than triple our EBITDA to $545 million and increase our revenue to about $8.5 billion upon completion of the tender offer, nearly achieving our 2017 financial targets two years ahead of plan. The acquisition of Norbert Dentressangle is a major leap forward, but we’re still in the early innings of our long-term growth plan.”
FedEx is Reshaping Last Mile with Autonomous Vehicles
FedEx is embarking on an expanded test of autonomous, driver-less delivery vehicles to develop its last-mile logistics.
The US logistics firm piloted autonomous vehicles from Nuro in April this year, and the pair will now explore that further in a multi-year partnership. Cosimo Leipold, Nuro’s head of partnerships, said the collaboration "will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener".
FedEx will explore a variety of on-road use cases for the autonomous fleet, including multi-stop and appointment-based deliveries, going beyond more traditional applications of the technology in single-route movement of goods from A-B. Exponential growth in ecommerce is spurring its broader experimentation in new autonomy solutions, Fed-Ex says, both in-warehouse and on-road.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, Vice President, Advanced Technology and Innovation, FedEx Corporation. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The changing role of couriers
Unlike structured delivery networks, operating under long-term partnerships and contracts, agility is where couriers deliver true value - and their ability to deftly solve last-mile fulfilment has most acutely been felt during the pandemic. For the billions of people around the world forced to stay at home to protect themselves and their communities from the spreading COVID-19 virus, couriers have been a constant. They may have been the only knock at the door some people experienced for weeks or months at a time.
But the last-mile has been uprooted by a boom in ecommerce, a shift that has been most apparent in the UK, US, China and Japan, according to the Global Parcel Delivery Market Insight Report 2021 by Apex Insight. These are markets with dominant economies and populations used to running their lives with a tap of a screen or double-click of a mouse.
“Getting last mile delivery right has long been a challenge for retailers,” says Kees Jacobs, Vice President, Consumer Goods and Retail at Capgemini. “In 2019, 97% of retail organisations felt their last-mile delivery models were not sustainable for full-scale implementation across all locations. Despite increasing demand from customers, companies were struggling to make the last mile profitable and efficient.”
Jacobs says that the pandemic alleviated some of these stresses in the short term. With no other option, consumers were understanding and tolerant, if not entirely happy, with longer delivery times and less transparent tracking. “But, as extremely high delivery demand continues to be normal, customers will expect brands to contract their delivery times,” he adds.
Last mile's role in ESG
Demand and volume weren’t the only things that have changed during the pandemic - businesses looked closer to home and as a result became more sustainable. Bricks and mortar stores were transformed from mini-showrooms to quasi-fulfilment centres. Online retailers and other businesses sought local solutions to ship more faster. In densely populated London, UK alone, Accenture found that delivery van emissions dropped by 17%, while Chicago, USA and Sydney, Australia saw similar emissions savings.