DP World recently announced an offer to acquire South African transport and logistics group, Imperial Logistics in a R12.7 billion (US$883 million) deal that would enhance its capabilities along supply chains as well as push forward its plan to transform into a logistics solutions provider.

Imperial Logistics has operations mainly across the African continent and in Europe.

"The acquisition will enhance DP World’s capabilities, particularly in Africa, building on its extensive infrastructure of ports, terminals and economic zones," DP World said in a statement, adding that the deal will also significantly accelerate DP World’s transformation into an advanced logistics company offering end to end supply chain services to the owners of cargo. 

DP World noted that its cash offer of ZAR66 per share represents a premium of 39.5% to the Imperial share price as of 7 July 2021 on the Johannesburg Stock Exchange (JSE) and a 34.2% premium to the 30-day volume weighted average price.

Improved Africa presence

The transaction is still subject to Imperial’s shareholder approval and other customary completion conditions including regulatory approvals.

DP World said Imperial has a presence across 25 countries, including a significant footprint in the high growth Africa market.

The Group focuses on fast-growing industries including healthcare, consumer, automotive, chemicals, industrial and commodities.

The acquisition of Imperial will add new capabilities to DP World, particularly in Africa. Combining the companies will create the continent’s best network across inland logistics, ports & terminals, economic zones and marine logistics, it added, saying that DP World aims to improve connectivity between African producers along fast-growing trade lanes to the rest of the world.

"The acquisition of Imperial will help DP World to build better and more efficient supply chains for the owners of cargo, especially in Africa. Imperial’s operations are complementary to our network of ports, terminals and logistics operations on the continent," said Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World.

He added that the acquisition will also build on Imperial’s contribution to the South African economy as the integration with DP World will strengthen South Africa’s position as a logistics hub for Africa.

Mohammed Akoojee, Group Chief Executive Officer of Imperial Logistics said: "This transaction will be value-enhancing for Imperial as the business will benefit from DP World’s leading technology, global networks and key trade lane volumes, while enabling us to build on our ‘Gateway to Africa’ strategic and growth ambitions."

"Combining DP World’s world-class infrastructure such as its investment and expertise in ports on the African continent, with Imperial’s logistics and market access platforms will enable us to offer integrated end-to-end solutions along key trade lanes into and out of Africa, also driving greater supply chain efficiencies, and ultimately enhancing value for all stakeholders," he added.

The deal will be funded from DP World’s existing available resources, the Dubai-based multinational logistics company said.