Russians to take over General Motors’ logistics operator

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JSC Russian Railways is the preferred bidder for Gefco, the PSA Peugeot Citroën logistics subsidiary that has just signed an exclusive logistics contract with General Motors Europe.

PSA said it was in exclusive negotiations with JSC Russian Railways (RZD) to sell a 75 per cent stake in Gefco for 800m euros (£640m) – after payment of a special dividend to PSA Peugeot Citroën of 100m euros.

The French motor manufacturer announced in February that it planned to sell a stake in Gefco as part of an asset disposal programme to raise 1.5 billion euros.

In preparation for the deal, Gefco has signed long term contracts with both PSA’s Automotive Division and General Motors.

In July, General Motors said it would transfer the majority of its logistics business in Europe to Gefco as the first step in a global alliance with PSA.

The deal, which takes effect next year, represents one of the largest ever logistics agreements in the European motor industry.

It covers the majority of the Opel/Vauxhall, Chevrolet and Cadillac logistics activities in Europe (including Russia) and includes services such as material and component deliveries to manufacturing plants, delivery of finished vehicles to dealerships and the transport of aftersales spare parts to distribution centres.

PSA said the transaction would enhance Gefco’s geographic expansion strategy in China, India and Latin America, but also accelerate its growth in Eastern and Central Europe, particularly in Russia. RZD and Gefco would propose unrivalled logistics services between Europe and Asia.

A shareholders agreement would ensure the protection of both parties interests as well as the sustained quality of the logistics services provided by Gefco. The management team would not be changed, with Luc Nadal continuing to serve as president and the head office remaining in France.

Gefco’s revenue in 2011 increased by 12.9 per cent to 3.8bn euros, including gains of 9.2 per cent on services performed for other group companies and 19.2 per cent on services sold to customers outside the group.

Russian Railways is the sole owner of the rail track and key rail infrastructure in Russia. It is responsible for some 42 per cent of Russia’s total freight traffic., In 2011, it handled almost 2.7 billion ton-kilometres of freight.

Consolidated revenue totalled RUB 1,481bn (36.1bn euros) in 2011, while EBITDA amounted to RUB 356bn (EUR 8.7bn euros).

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