M&A panel talks outlook for GCC at Leaders in Logisticsby ASC Staff on Nov 8, 2016
The global transport, logistics and supply chain industry has witnessed some significant mergers and acquisitions in the past few years, with M&A activity set to soar past the US $73 billion mark in 2016 according to consulting firm KPMG.
With the objective of diversifying portfolios, incorporating new service offerings, and increasing the size and scale of companies to take advantage of economies of scale, it’s easy to understand why the Middle East’s logistics industry has shown such great potential for mergers and acquisition.
With a strong positive outlook for global M&A and a growing trend across the Middle East towards merger and acquisition activity, this panel will discuss factors that will continue to spark M&A growth going forward, strategies and vital regulatory practicalities concerning M&A activity in the region, the key factors that determine whether companies should be looking at mergers and acquisitions, and the challenges of integrating diverse and deep-rooted organisational cultures, hierarchies, systems and procedures.
Key quotes from the panel:
"Trade is consolidating. The major super markets are consolidating which is leading to more consolidation in the logistics service providers. And the client wants fewer players, a grovery store doesn’t want several different suppliers that it needs to deal with, it wants a central supplier or a handful of suppliers that can meet its needs"
"It’s very expensive to establish a new brand, so when we pursue an M&A we prefer to aquire a company with an existing market position and brand so that it creates that synergy with our group." Koshy Matthew, Chief Operating Officer, Enhance UAE
"The industry is changing very fast, the customer wants the product faster and cheaper, which is causing us to have to find ways to meet this need. We’ve been turning to technology to help us in this regard. We need to be prepared, we don’t know what will happen in terms of profits, but our industry is changing and we need to position ourselves to be in the best position to meet that change." Walid Daniel, Chief Executive Officer, Span Group
"The private families that run the first business, the manufacturers and suppliers, are looking for ways to consolidate their own business and they go downstream, acquiring an incoming producing logistics company to bring their operation in-house and provide an additional resource stream because logistics in the GCC is a very stable industry." Marcus Meissner, Managing Partner, Middle East, Africa & Asia, Camelot Management Consultants Middle East