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Logistics merger creates FTSE 100 group at a stroke

Written by Business Weekly

Wednesday, 01 March 2000

Arch rivals NFC and Ocean Group have agreed to merge to create a £3.2bn company - the world's largest contract logistics group and a probable FTSE 100 index entrant. Arch rivals NFC and Ocean Group have agreed to merge to create a £3.2bn company - the world's largest contract logistics group and a probable FTSE 100 index entrant. The new group will operate under the Exel banner and the move is likely to fuel further consolidation in the transport and logistics industry. Analysts haven't ruled out the possibility of an 11th-hour counter bid from a player such as UPS or Deutsche Post, both with a huge war chest for just such an acquisition. The deal on the table combines Ocean's MSAS air freight business with NFC's traditional strengths in regional distribution via truck. Ocean chief executive, John Allan, will take a similar role in Exel. He said customers increasingly wanted a door-to-door service around the world. The deal will save the businesses £15m in costs a year. But Allan said the real crux of the transaction was to claim global market share quicker via better use of the internet. Exel, free of debt, will be able to fill a void in countries like Germany and Italy via acquisition. The combined group had operating profits of some £176m last year and revenues of £3.5bn. NFC is predicted to be on course for £90m profits this year. John Devaney - the former CEO at Eastern Group - will be chairman of Exel while Gerry Murphy, who has masterminded NFC's tough restructuring strategy, is stepping down.  for fr

 

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