PostNord to buy Sweden’s second-largest 3PL company
Scandinavian postal company PostNord has signed a deal to acquire the second largest company in Sweden’s third-party logistics sector, subject to regulatory approval. PostNord, the group formed from the merger of Sweden’s Posten and Denmark’s Post Danmark, said the acquisition of Green Cargo Logistics will hand it a “strong and profitable” company in a market experiencing “significant growth”.
The acquisition comes as part of PostNord’s ongoing strategy to strengthen its logistics operations as it restructures to focus on the area of key growth while streamlining its less profitable mail operations.
Green Cargo Logistics, a subsidiary of government-owned Green Cargo, has been going through an expansion in recent years and in 2011 recorded sales of SEK 1bn ($150m USD), with an operating profit of SEK 61m ($9.1m USD).
The company has a network of facilities comprising 260,000 square metres (2.8m square feet) of storage space in modern premises within Stockholm, Norrköping, Gothenburg, Helsingborg and Copenhagen.
Henrik Höjsgaard is set to be chairman of the board of the acquired company, which will be renamed as it becomes part of PostNord’s Logistics division.
Lars Idermark, president and chief executive of PostNord, said: “Green Cargo Logistics is a well-managed and profitable business and an excellent fit with our strategic ambitions within the logistics area.
“The business will constitute a solid foundation for our continued development within third-party logistics,” added Idermark.
Green Cargo, which operates around 60% of Sweden’s cargo transport with a SEK 6.4bn ($960m USD) turnover in total, said it was selling its Logistics operation to focus more of its resources on its rail transport business.
The company is currently working on a strategy to become a rail-only cargo company, and last year sold off its road haulage business while also closing down its unprofitable ferry operations.
Selling off non-core operations would help the capital-heavy business in its plans to put major investments into new railway locomotives and rolling stock.
Commenting on the sale of the Logistics business, Mikael Stöhr, the Green Cargo chief executive, said: “This is an excellent deal for both Green Cargo and its subsidiary Logistics. Green Cargo will free up resources in order to develop our railway logistics and broaden our offer to the transport-dependent Swedish trade and industry.
“Third party logistics will get a strong owner which is able to invest in its continued growth,” said Stöhr.