DFDS and Ekol Trade Barbs as Acquisition Unravels

 

DFDS' plans to acquire Turkish freight company Ekol Logistics have fallen apart in a public and acrimonious feud, with both sides claiming that they initiated a withdrawal.  

In April, Danish freight ferry giant DFDS signed an agreement to buy Ekol for $545 million, adding more transport capacity to its cargo network in the Mediterranean. DFDS anticipated that with nearshoring picking up pace in the EU, Turkish trade with Europe would grow by 14 percent per year, creating new opportunities for companies that operate on East Med trade lanes. The firms secured merger approval from Turkey's competition authorities and expected to have EU approval by the end of the year. 

On Friday, DFDS made an unexpected announcement: it was dropping the proposed acquisition. "As certain contractual conditions have not been satisfied by the agreed deadline, DFDS has terminated the share purchase agreement and the transaction will consequently not take place," the firm said in a brief statement. DFDS added that it was revising its earnings forecast down because of the failed acquisition, along with a slowing intra-EU freight market and increasing competition on European routes. 

Ekol released a statement with a much different account of the fallout. The Turkish firm said that it had withdrawn from the agreement itself "because we encountered unfair demands that did not match our values, principles and professionalism."

Ekol accused DFDS' chairman of asking for a price discount just 24 hours before the closing deadline for the agreement. "We said that if they insisted on the discount request, we would cancel the agreement. It was inappropriate for them to make this request on the last day," Ekol Chairman Ahmet Musul said. 

Ekol thanked the employees who had worked to create the deal, and said that it would continue to work independently towards a "stronger future together."