PSA completes Gefco sale to RZD

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PSA Peugeot Citroën has completed the sale of shares representing 75% of the capital and voting rights of its former logistics subsidiary Gefco to Russian Railways (RZD). The completion of the deal is in accordance with the agreement signed between the two companies last November.

 

The French carmaker sold the 75% interest to RZD for €800m ($1.05 billion) after Gefco paid it a €100m special dividend. PSA retains the remaining 25% stake in Gefco.

The Russian rail giant, meanwhile, intends to retain the management of Gefco and all of its existing business units, including those engaged in providing services to PSA.

With RZD, Gefco intends to further its geographic expansion strategy in China, India and Latin America, as well as accelerate growth in Eastern and Central Europe, particularly in Russia.

In November last year RZD said Gefco would play an integral part in a new rail freight corridor linking Europe with Asia via a new common rail enterprise being planned between Russia, Belarus and Kazakhstan (read more here).

Russian Railways has been investing in making the route a competitive alternative to ocean routes and said the next logical step would be the development of the sales network for transcontinental transport services via an international logistics company.

The beginning of 2013 also sees Gefco take over as the exclusive fourth-party logistics provider for General Motors in Europe and Russia. Gefco’s contract with GM is expected to boost revenue by 20% but will depend on its ability to find efficiencies with PSA and other customers.

RZD has recently announced that several of its senior executives have joined the Supervisory Board of Gefco, including Vladimir Yakunin, president of Russian Railways, who was elected chairman of the board at the end of the December.

Also joining the board from RZD are Vadim Mikhailov, senior vice president, Alexei Kamenobrodsky, head of the Business Project Management Centre at Russian Railways, Pavel Ilyich, deputy head of Corporate Finance, Janar Rymzhanova, adviser to Yakunin, and Pyotr Baskakov, managing director of JSC TransContainer.

Henri Kuitunen, CEO of SteveCo, and Paul Boston, managing director at the bank J.P. Morgan, are joining the Board as independent directors.

Gefco’s Supervisory Board has 12 members, including four from PSA Peugeot Citroën.