Two deals have kicked off aviation services consolidation in 2019, with Danish freight-forwarder DSV launching a bid for Swiss rival Panalpina, and Menzies Aviation securing approval to acquire UK ground handler Airline Services.

Panalpina is best known as a freight forwarder, but the company carried over a million tons of air freight in 2018, using a Panalpina-branded Boeing 747-8F on wet-lease from US cargo specialist Atlas Air.

DSV submitted an unsolicited, nonbinding proposal to acquire the Panalpina for CHF170 ($172) per share, comprising a mix of cash and DSV shares, and its board of directors of Panalpina is reviewing the offer, the company said Jan 17.

DSV confirmed it has made an “indicative and private proposal to Panalpina’s board of directors to acquire Panalpina,” consisting of 1.58 DSV shares and CHF55 in cash for each Panalpina share, equating to CHF170 per share.

Joining the two companies would create “a leading global transport and logistics company,” with significant growth potential, DSV said.

“The combined business would generate expected revenues of more than DKK110 billion ($16.8 billion) and EBITDA of more than DKK7 billion on a pro-forma 2018 basis (excluding any synergy benefits),” DSV said.  

The DSV offer could trigger a bidding war for Panalpina, as there have been reports that Swiss company Kuehne & Nagel might also be interested. 

On Jan. 17, the UK Competition and Markets Authority (CMA) separately cleared Menzies Aviation’s Apr. 4, 2018, deal to take over of part of Airline Services’ business.

A Phase 1 investigation of the Menzies Aviation deal brought up competition concerns, because both companies are involved in aircraft de-icing and ground handling at key airports in England and Scotland. However, after a deeper Phase 2 investigation, the CMA has given the deal a green light.

“The CMA has today issued its final decision. Having thoroughly scrutinized the wider evidence base considered in the Phase 2 inquiry, it has found that the market for ground-handling services has a strong recent history of companies entering and competing for contracts. The CMA also found that Menzies and Airline Services are not close competitors in the market for de-icing services, meaning the takeover would not lead to a substantial lessening of competition,” the agency said. 

Menzies welcomed the clearance.  

“We now look forward to taking control of the business, driving the identified synergies and boosting our footprint and product offering across our UK business,” Menzies Aviation’s parent company, John Menzies, said in a Jan. 17 trading update.

Menzies Aviation provides passenger, ramp and cargo services. The company is active at 219 airports in 37 countries and employs 33,000 people.

The company added that its 2018 trading performance has been in line with market expectations. Preliminary results will be released March 13.

Victoria Moores,