DHL Global Forwarding CEO Tim Scharwath discussed the company’s M&A strategy during the TPM23 Conference by S&P Global Market Intelligence in Long Beach, California.
Scharwath dodged a question about whether DHL is planning to acquire DB Schenker.
In response, the shipping executive instead laid out the chief considerations in DHL’s M&A strategy.
1. Does the acquisition strategically make sense for DHL and its divisions?
While DHL Global Forwarding is focused on freight forwarding services, it is composed of several other divisions. This includes Post & Parcel, a letter and parcel distribution for Germany, DHL Express, which is focused on contract logistics and DHL eCommerce solutions, which distributes packages outside Germany.
The freight forwarder looks at how each division could be affected. “We have to manage that balance in ways that not one part becomes too big in the overall scheme of things,” Scharwath said.
2. What does the acquisition mean, financially?
Next, comes the question of finances. When considering an acquisition, DHL officials ask themselves how it will affect the company’s bottom line.
“What do we have to pay for it, what's the outcome, and how much more financial results do we get from it?” Scharwath said.
3. How do you integrate the new acquired company?
Then comes the question of how to integrate the acquired company into DHL’s existing operations. Once it becomes clear a deal is happening, it’s time to plan that process, the CEO said.
Scharwath went through a similar thought process during the acquisition of Hillebrand in 2021, a logistics company that specializes in beverages, beer, wine and spirits, he said.
Speculation around the acquisition of DB Schenker have been floating around for a while. Although, DB Schenker is not for sale at the moment, the Germany-based forwarder announced in December 2022 that it had “assigned DB's Management Board the task of examining and preparing the case for a potential sale of up to 100% of its shares in DB Schenker.” Any more details pertaining to the sale would be shared at a later date, the company said.
DHL did not disclose details on any potential acquisition at the time of publication. The company is a quiet period ahead of its March 9 earnings.