Merger & Acquisition Strategies

4 Reports that Predict a Bright Future for Logistics M&A

In the past few decades, M&A activities had taken a slow-down but in the coming days, there will be a considerable rise in the volume of M&A deals. This is mostly driven by the need of the logistics companies to add capabilities, introduce new technology and services, and to drive tie-ups in the logistics industry. Take a look at the reports that predict a bright future for M&A activities in logistics:

1. Accenture: Why M&A is the Right Option to Capitalize on Growth Opportunities in the Freight and Logistics Industry

https://www.accenture.com/t20150708T033755__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Industries_3/Accenture-High-Performance-Freight-Logistics-Mergers-Acquisitions.pdf

This report by Accenture conducted in 2012 found that the growth of M&A activities in Logistics industry will be driven by a desire to attain a close position to the industry leaders in the ever widening markets of logistics mergers and acquisitions. With the economic climate changing continuously, the Freight and Logistics companies are seeking to raise their margins while balancing the cost pressures and increasing demands of the customers. The only solution to this problem is to achieve inorganic growth (that is, by acquiring new business through M&A or take-overs).

2. PricewaterhouseCoopers: Transportation and Logistics 2030

https://www.pwc.com/gx/en/transportation-logistics/tl2030/emerging-markets/pdf/tl2030_vol3_final.pdf

This report points out that in the coming years, the larger and financially equipped companies will rely on M&A activities for further growth and expansion. On the other hand, with limited capital and other resources, the smaller logistics companies will aim for organic growth (that is, by base expansion, product development or increased output). The report predicts that as the industry matures, the logistics market in the developing countries will, subsequently, grow strong which will further drive M&A activities.

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3. Capstone Partners: Transport and Logistics (Q1 2016)

http://www.capstonellc.com/sites/default/files/CapstoneTransportation%20and%20Logistics_Q1%202016%20Report.pdf

In the first quarter of 2016, M&A activities in the transportation and logistics industry witnessed a steep growth and it is expected to grow in the coming years. As the demand of providers will increase, accompanied by their need to improve their capabilities in terms of better technology, better and optimized routes, there will be a growth in M&A activities. The logistics companies will look forward to M&A as a part of their strategic plan to expand their geographic base while diversifying their services and reaching out to new customers. Low fuel prices, a stronger dollar and technological advancements are supposed to influence the drive of M&A activities.

4. SDR Ventures: Logistics Report

http://sdrventures.com/wp-content/uploads/2016/04/SDR-Ventures-Logistics-Report-Q1-2016.pdf

After facing a slow-down in 2015, M&A activities are expected to grow in the comings quarters of 2016. The report suggests that the beginning of 2016 has been strong for the logistics industry. It further suggests that the Air Freight will witness a large number of M&A deals. With the growth of disruptors such as Amazon, logistics companies will respond to the changing scenario by merging with and acquiring new companies.

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