News / XPO to buy part of Kuehne + Nagel's UK contract logistics business

As XPO Logistics continues to ponder options to sell parts of its own business, it has returned to the acquisition trail with an agreement to buy part of Kuehne + Nagel’s contract logistics trade in the UK.

This morning K+N announced it had entered into a “definitive agreement” to sell the drinks logistics, food services and retail & technology vertical in its UK contract logistics division, part of wide-ranging review of the Switzerland-headquartered freight forwarder’s operations.

Although both parties declined to disclose the purchase prices, K+N did say the operations concerned “generated a turnover of approximately Sfr750m ($808m) in 2019 and are supported by 7,500 employees”.

Detlef Trefzger, K+N chief executive, explained: “One year ago, we first announced the strategic review of our contract logistics business to improve profitability and focus on our core, scalable solutions. We have now reached a major milestone in this effort, having secured an agreement to sell significant non-core assets in the UK.

“With XPO Logistics, we are pleased to have found a good new home for our customers and employees.”

However, KN claimed it “remains highly committed to excellent customer solutions and service in the UK across all business units, including contract logistics.

“In particular, the company retains the industry verticals aerospace, government and pharma. These are among the group’s scalable leverage areas.” it said.

The transaction is subject to customary closing conditions including merger clearance by the competent competition authorities and is expected to close in the second half of the year.

In a separate development, XPO Logistics’ UK arm announced last week it had signed a new “long-term partnership agreement with Mercedes-Benz Parts Logistics to manage UK parts distribution”.

The contract will see XPO distributing automotive parts to Mercedes-Benz’s UK retail and commercial vehicle dealerships, operating more than 40 daily routes from the manufacturer’s European Logistics Centre in Milton Keynes to XPO’s overnight-delivery depots across the UK. Part of the deal will see XPO acquire 42 new Mercedes-Benz Actros trucks dedicated to serving the contract.

Juan Manuel Santiago Mendez, chief executive of Mercedes-Benz Parts Logistics in the UK, said: “Our UK operation keeps consumers and businesses moving – it is responsible for more than 750,000 part numbers.

“We believe XPO has the scale, capabilities and expertise required to support our retailers and dealers with reliable distribution. They have designed a comprehensive solution to our high standards, and their technology should enhance network visibility.”