May 12, 2015

Mitsui-Soko Holdings to acquire Danish logistics firm

Mitsui-Soko Holdings (Mitsui-Soko HD) announced on May 11 that it would acquire the Denmark-headquartered logistics firm Prime Cargo Group. It will buy all shares in the Danish subsidiary of the Group from its holding company effective May 29. Together with that, Mitsui-Soko HD will also acquire the Hong Kong subsidiary that is owned by executives of the Group. The Prime Cargo Group is an international logistics company whose strength lies in the air/marine transport of apparels. By acquiring Prime Cargo Group, Mitsui-Soko HD will be able to make a full-fledged foray into the Eastern European market, as well as boost its ability to capture cargoes between Asia, its main thrust, and Northern Europe. Total acquisition price of the above two companies stood at Y5.2 billion.

Under the deal, Mitsui-Soko HD's European subsidiary will acquire the Danish subsidiary Prime Cargo A/S (headquartered in Kolding, Denmark and led by Morten Hogsberg Nielsen) from the Prime Cargo Group's holding company Prime Cargo Holdings, while Mitsui-Soko HD's Hong Kong subsidiary will purchase the Prime Cargo Group's Hong Kong subsidiary Prime Cargo (H.K.) (headquartered in Hong Kong and led by Jesper Magnus Hoilund) from the Group's executives. With this, Mitsui-Soko HD will acquire all businesses of the Prime Cargo Group.

Mitsui-Soko HD entered into an agency agreement with the Prime Cargo Group's Danish subsidiary in 2012, leading to a partnership in the area of logistics services in the Northern European region. By adding the network of bases held by the Prime Cargo Group in Northern Europe and China to Mitsui-Soko HD's overseas network, the latter aims to reinforce its ability to capture the demand for apparel products between Asia, including Japan, and Europe in the future. It will capitalize on the network in Central and Eastern Europe of the Czech subsidiary PST CLC that it acquired in 2012.

The Prime Cargo Group handled the international transport of apparels between Eastern Europe and China through the affiliated company in Poland of its Danish subsidiary and the affiliated company in China of its Hong Kong subsidiary. The production bases of apparel have been shifting to Southeast Asia in recent years, so it seems that the target of the acquisition is to reinforce the overseas network of Mitsui-Soko HD, which is expanding its business in Southeast Asia, by putting the new acquisitions under its umbrella.

In fiscal 2014 that ended in June 2014, the Danish subsidiary posted Y7.8 billion in sales, Y96 million in operating profit, Y75 million in ordinary profit and Y56 million in net profit. Its net assets totaled Y900 million and gross assets amounted to Y2.4 billion. It is capitalized at DKK18 million (Y31 million). Meanwhile, the Hong Kong subsidiary's business results for fiscal 2013 that ended in December 2013 showed sales amounting to Y6.9 billion, operating profit of Y469 million, ordinary profit of Y467 million and net profit of Y350 million. Net and gross assets of the company totaled Y1 billion and Y3.1 billion, respectively. Its capital stands at HK$54,000 (Y830,000).

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