DFDS: Turkish logistics acquisition reaches completion

Danish ferry and logistics company DFDS has completed the acquisition of the international transport network of Ekol Logistics, headquartered in Türkiye’s capital city of Istanbul.

As disclosed, DFDS purchased the Turkish logistics player for a debt-free price of DKK 1.8 billion (about €240 million). The acquisition is reportedly based on a revised set of terms agreed upon since the termination of the share purchase agreement at the beginning of November 2024.

According to DFDS representatives, Ekol Logistics will be managed as a separate business unit as part of the Logistics Division, although some country organizations are set to be integrated into the existing Continent business unit.

DFDS also confirmed that it now has an option to extend the duration of the terminal agreement with Yalova Port.

“The strategic logic of the sale of Ekol Logistics’ international transport network to our longstanding partner DFDS is compelling. On behalf of all my great colleagues, I’m therefore very pleased we came together again and forged a revised agreement. A new growth story can begin”, commented Ahmet Musul, founder and Chair of the Board of Directors of Ekol Logistics.

Speaking further about the transaction, Torben Carlsen, CEO of DFDS, emphasized that this development is expected to strengthen DFDS’ transport network and ‘improve’ their ability to support Türkiye’s ‘ongoing growth to become a manufacturing hub.’

As informed, Ekol Logistics’ transport network builds on a partnership struck in 2019 with the Danish firm through a long-term customer agreement, set to provide “stable” access to ferry capacity in the Mediterranean.

The completion of the purchase of Ekol Logistics is, thus, anticipated to bolster DFDS’ Mediterranean ferry route system and, by extension, expand the northern European ferry/road business model and connect Türkiye to this existing logistics network, DFDS further spotlighted.

Furthermore, as the Danish company stated, the recent purchase is also set to expand DFDS’ presence in a high-growth region supported by nearshoring of supply chains closer to Europe.

As per DFDS, Ekol Logistics’ EBIT margin declined to 2.5% last year. For this year, the company was expected to report a loss.

The key drivers of these earnings developments are believed to have been the results of both commercial and operational hurdles, such as loss of market share and margin pressure. These, on the other hand, are thought to have come out of shifting trade flow balances between Türkiye and Europe as Turkish import volumes slowed down in 2024 while export volumes increased.

Because of this, DFDS’ business and integration plan’s financial objective has been intact since April 2024, the company reported, intending to improve the EBIT margin to 5% by year-end 2027.

As informed, a break-even result could be achieved by year-end 2025 while annual revenue growth could exceed 5%.

Integration preparations have reportedly been underway since April this year, with plans in place to drive the earnings turn-around and the integration with a focus on three phases:

• Phase 1 (first year): Improving volume throughput and equipment use by ‘enhancing’ the sale of transports to and from Türkiye by leveraging DFDS’ existing northern European network. Grow volumes to Türkiye from acquired European offices;
• Phase 2 (first-to-second year): Integrating the acquired European networks with the existing ones to ‘gain scale benefits’, including ‘improved’ use of equipment and facilities, as well as the consolidation of offices/facilities, and moving select volumes to ferry/rail from the road.
• Phase 3 (second-through-third year): ‘Optimizing’ the network to complement all transport solutions (FTL/LTL).

Investment-wise, the Danish logistics company has allocated hefty funds and formed numerous partnerships to support its growth and its sustainability-focused targets, whether through ‘strategic’ purchases or fleet renewals.

Notably, in 2021, DFDS made two additions to its portfolio. In early September of that year, the EU greenlit the acquisition of Dutch cold chain logistics provider HSF Logistics Group. That same month, the Copenhagen-based logistics firm revealed it was about to break into Eastern Europe as well via the purchase of compatriot freight forwarder ICT Logistics.

In 2022, Belgian North Sea Port and Swedish Port of Gothenburg teamed up to set up a green corridor, aiming toward using clean fuels for seagoing vessels by 2025. By June 2024, the Port of Gothenburg, North Sea Port, and DFDS welcomed the port of Antwerp-Bruges as it joined the Sweden-Belgium green corridor.

As explained, within the scope of this initiative, two of DFDS’s ammonia-fueled roll-on/roll-off (RoRo) vessels are expected to operate on the routes between Sweden and Belgium by 2030, while the ports stated they would “step up” the efforts on electrification and ammonia bunkering, making it the “world’s first green ammonia shipping corridor for freight vessels.”

On the fleet side of the story, in May this year, DFDS announced plans to invest a staggering €1 billion on six battery electric ships that were set to service the Dunkirk-Dover and Calais-Dover routes to carry passengers and freight between the UK and the European Union. The vessels are projected to help push the Channel’s zero-emission goals further.