Today DFDS A/S has entered into an agreement with DSV -
De Sammensluttede Vognmænd af 13-7 1976 A/S - (the joint
hauliers of 13-7-1976) to sell all shares in the DFDS Dan
Transport Group A/S (“DFDS Dan Transport”). The sale is
effective as of 30 September 2000.
- The total sales price for the DFDS Dan Transport is
DKK 5.5 billion, including net interest-bearing
debt.
- The net profit from the sale of DFDS Dan Transport
is approximately DKK 800 million.
- DFDS will have financial strength to develop and
create growth for the business areas passenger shipping
and ro/ro liner traffic.
Background for sale
As explained in the prospectus of October 1999 DFDS
wanted to separate its three divisions, DFDS Dan Transport,
DFDS Tor Line, and DFDS Seaways, into independent legal
entities to be able to enter into alliances or new owner
constellations.
This was accomplished as planned in the first half of
2000, and a sale of DFDS Dan Transport was not included in
the strategic goals for DFDS at that time.
Even before the integration of Dan Transport, which was
acquired in May 1999, had been finalised, serious interest
at an attractive price level has been shown in acquiring
DFDS Dan Transport, as stated in the Report to Copenhagen
Stock Exchange of 4 September 2000.
The Executive Board has therefore decided to sell the
land transport activities in order to expand DFDS’ position
as a leading shipping company in ro/ro liner traffic and
passenger shipping in Northern Europe and not least to
create value for the shareholders.
New opportunities for the continuing business
areas
After the sale of DFDS Dan Transport the DFDS Group has
an annual turnover of approximately DKK 4.3 billion and
more than 3,000 employees within the two main business
areas:
Passenger shipping – DFDS Seaways
DFDS Seaways has an annual turnover of DKK 2 billion
and more than 1,900 employees. The company’s seven ships
transport nearly 1.8 million passengers annually to
attractive cities in Northern Europe.
Denmark’s second-largest business travel bureau, DFDS
Travel, is part of this business area. The company has an
annual turnover of approximately DKK 160 million, and
approximately 300 employees in Denmark, Norway, and
Sweden.
Ro/ro liner traffic – DFDS Tor Line
DFDS Tor Line has a turnover of more than DKK 2
billion per year and employs a staff of more than 1,200 on
23 ships and in seven port terminals. Since the 1960s the
company has built up a comprehensive and strategically
well-placed route network.
The market for passenger traffic and ro/ro liner traffic
in Northern Europe is expanding, and DFDS has identified
several attractive development prospects. The strengthened
financial situation makes it possible for DFDS to speed up
the exploitation of this potential through organic growth
and strengthening of the present activities including
development of new concepts. In addition, industrial
partnerships, acquisitions and mergers will be
considered.
In the coming months DFDS will analyse how the
development prospects can best be exploited. As an
important element in the analysis DFDS’ financial situation
will be re-evaluated with the purpose of creating value for
the shareholders.
Continued cooperation with the new, large
European transport group
DFDS Dan Transport and DSV Transport and Logistics will
be merged under the name “DFDS Transport Group A/S”,
becoming a group with an annual turnover of DKK 18 billion
and more than 10,000 employees.
DFDS Tor Line and DFDS Seaways have entered into a
strategic cooperation agreement with the new DFDS
Transport, ensuring the transport company access to DFDS’
attractive route network. At the same time DFDS Tor Line
and DFDS Seaways retain a healthy customer basis and gain
increased volumes.
DFDS and DSV have also agreed that the new DFDS
Transport will use DFDS Travel as its business travel
bureau.
Payment for DFDS Dan Transport
Payment for the DFDS Transport Shares will be made in
cash.
As part of DSV’s financing of the acquisition it has
been agreed that DSV will issue 3,775,000 B shares in a
directed issue to DFDS at a price of DKK 200 per share,
totalling DKK 755 million. DFDS has entered into a binding
agreement with four institutional investors – Mercury
Assets Management, ATP (Danish Labour Market Supplementary
Pension), LD (LD Pension), and PFA (PFA Pension) –
regarding direct resale of this share holding to the
mentioned investors at a price corresponding to DFDS’
acquisition price.
Shareholder value in the continuing
company
As stated in the report for the first half year 2000
DFDS’ Executive Board has introduced a new value-based
management concept, Economic Profit (EP), to strengthen the
creation of value throughout the Group and thus make DFDS a
more attractive investment for shareholders. The EP concept
will be continued after the sale of DFDS Dan Transport.
EP will form the basis for the Group’s financial
objectives, planning, and performance follow-up, and be
included in the decision making for all large
investments.
Organisation and management
Today the DFDS Dan Transport is operated as an
independent division in the DFDS Group, and therefore the
sale of DFDS Dan Transport will have a limited effect on
the continuing divisions in the DFDS Group, while the DFDS
A/S group and management functions will be adapted to the
reduced requirements resulting from the sale.
Hence, according to agreement, Thorleif Blok, President
and CEO, withdraws from his current position and will be
available for the Board of Directors and the Executive
Board for a period of time.
The new Executive Board will consist of the following
members: Christian Merrild, Executive Vice President;
Bo-Lennart Thorbjörnsson, Executive Vice President; and Ole
Frie, Executive Vice President and presiding member of the
Executive Board.
Ole Frie withdraws from his position as Managing
Director of DFDS Dan Transport Group A/S to assume the
position as Managing Director of DFDS Tor Line Group
A/S.
Bo-Lennart Thorbjörnsson will continue as Managing
Director of DFDS Seaways A/S.
Expectations to the accounts for the whole year
2000
The sale of the DFDS Dan Transport will result in an
accounting profit which, according to a provisional
estimate, is calculated to be approximately DKK 800
million. The calculation of the final profit is dependent
on the balance in DFDS Dan Transport as of 30 September
2000, and therefore adjustments can occur in the size of
the amount as a result of the development in the net
interest-bearing debt at the end of third quarter, among
other things. However, the maximum profit deviation may not
exceed +/- DKK 200 million. The accounting profit will be
entered into the annual accounts under extraordinary
items.
The sale is effective as of 30 September 2000. Therefore
DFDS’ annual accounts for 2000 will only include DFDS Dan
Transport’s result for the period January to September.
DFDS Dan Transport will not be included in the consolidated
accounts, but the result for the period after tax will be
entered in a line called “Result of non-continuing
activities.”
Consequently, for the entire year 2000 it is expected
that the result before extraordinary items and tax will be
approximately DKK 250 million, and the net result
approximately DKK 950 million.
Due to the extraordinary profit of approximately DKK 800
million the transaction will result in an increase in DFDS
A/S’ equity from DKK 3.3 billion at the end of the first
half year 2000 to an expected equity at the end of 2000 of
approximately DKK 4.3 billion before payment of a dividend
to shareholders.
Yours sincerely,
DFDS A/S
Jan Erlund
Chairman of the Board
Questions may be addressed to: Jan Erlund, Chairman
of the Board, telephone +45 33 41 41 41.