8:20 am, May 12, 2023
Hedin Group’s boss has said the purchase of four Mercedes Benz dealerships in London will give it a ‘foothold’ for further growth in the UK.
The acquisitive Swedish automotive business recently pulled its offer for the listed car dealer group Pendragon, but that hasn’t dented its ambitions for UK expansion.
CEO Anders Hedin said the deal in London – which saw the Mercedes dealers in Brooklands, Dartford, Croydon and West Bromley join the group last month – will help the firm expand further in the UK.
Hedin currently operates in 13 countries, has 270 dealers representing 44 brands and employs 8,000 staff. Former Pendragon boss Trevor Finn is also one of his team.
Hedin said: ‘In early April, we completed the acquisition of four Mercedes-Benz dealerships in London and welcomed around 360 new co-workers to the Hedin family.
‘We look forward to running and developing the London businesses and with our first own retail presence in the UK, we have established a foothold for further growth in Europe’s second largest car market.’
Automotive industry analyst Mike Jones said Hedin’s ambitions should not come as a shock.
He told Car Dealer: ‘The comment from Hedin that they are looking for further expansion in the UK comes as no surprise to me. When I speak to overseas investors, the UK is seen as a very attractive market, with stable regulation and high quality businesses.
‘Indeed, a number of them are in active discussions with me over the UK market at the moment as they seek to expand.
‘UK listed retailers remain phenomenally cheap by international standards making them very attractive for investors who can raise the funds and build the credibility to retain manufacturer relationships.’
Anders Hedin’s comments were made in the group’s first quarter results which revealed sales were up 17 per cent generating revenue of £1.3bn and net profit of £30.3m.
Hedin added: ‘The first quarter of the year was another record quarter for Hedin Mobility Group in terms of reported net sales.
‘We are also growing year-on-year adjusted for acquisitions during the quarter, despite the fact that several of our total markets measured in registered passenger cars decreased during the first three months of the year.’
Hedin withdrew its offer of 29p per share for Pendragon in December blaming ‘challenging market conditions’.
It made its conditional cash offer in September after blocking a similar deal by American giant Lithia Motors in the summer. Lithia went on to snap up Jardine in a £325m acquisition in March this year.
David Kendrick, CEO of UHY Hacker Young, said he didn’t think Hedin would target Pendragon again.
He told Car Dealer: ‘I am not convinced they will go back in for Pendragon – feels like that ship has sailed.
‘That said, it’s not easy to buy such a scaled footprint in the UK as larger opportunities are limited, therefore it will be a very interesting one to watch.’
