Denmark-based transport and logistics specialist DSV will establish a $10 billion logistics joint venture with NEOM, to support the development of the projects taking shape in NEOM, Saudi Arabia.
The partnership will focus on providing logistics services for NEOM in the coming years.
Multi-billion-dollar leading logistics joint venture will provide a full suite of ground, sea and air logistics services, in accordance with DSV.
Under the agreement, the joint venture will provide end-to-end supply chain management, development and investments in transport and logistics assets and infrastructure as well as transport and delivery of goods and materials within NEOM.
NEOM will hold 51% of the joint venture with DSV holding the remaining 49%.
The business plan for the joint venture is expected to require a $10 billion gross investment. In accordance with the business plan, the total shareholder funding commitment up and until 31 December 2031 is $5 billion.
“NEOM and DSV commits to provide funding to realise the business plan pro rata to their respective shareholdings. It is expected that the return on invested capital be in line with DSV’s existing target. It is not expected that the joint venture will have any material financial impact on DSV for the financial year 2023,” noted DSV in its release.
However, the deal is awaiting customary regulatory approvals, which are expected to be obtained in the second quarter of 2024.
Nadhmi Al-Nasr, chief executive of NEOM said: “The economic benefit to this partnership will not only provide tens of thousands of jobs, but it will also enable growth to capture local and regional market share. It’s a living example of Saudi Vision 2030 in action, fostering job creation and building a future-leaning economy.”
Jens Bjørn Andersen, group chief executive of DSV noted: “DSV already has a strong presence in Saudi Arabia, and this is a significant growth opportunity for us in the region and we look forward to working with NEOM Company and bringing our logistics capabilities to the table.”
