FedEx acquires Poland-based courier company Opek Sp.Z o.o.
April 05, 2012
Earlier today, FedEx announced that it has inked an agreement to acquire Poland-based courier company Opek Sp.Z o.o.
Financial terms were not disclosed. Company officials said that this acquisition, which is expected to close this summer, is part of its growth strategy in Europe and is expected to supplement FedEx’ service portfolio in Poland.
Established in 1994, Opek’s domestic ground network covers all of Poland, with the company having an estimated $70 million in annual revenue and 12.5 million annual shipments. It has an automated hub in Lomianki, which is near Warsaw, and hubs in Lodz and Katowice, with a total of 44 stations in the country, more than 1,200 employees, and more than 1,300 contracted drivers.
“FedEx has been active in Poland for 23 years,” a company spokesperson told LM. “This acquisition will allow FedEx to improve our service proposition even further in Poland. With this acquisition, we will continue to invest in the long-term growth in Poland and enhance our network in Eastern Europe.”
In terms of customer benefits as a result of this acquisition, the spokesperson explained that customers from both companies will benefit from the acquisition, once it is closed. FedEx customers will benefit from Opek’s well-established domestic network in Poland, and Opek’s customers will get direct access to the global FedEx network.
The spokesperson added that FedEx is keen to benefit from the well-established network of Opek, as well as from the workforce and professional knowledge of the employees and also noted that for now we do not anticipate any changes in terms of personnel regarding this acquisition.
“In recent years, we have made significant investments throughout Europe, greatly expanding our network coverage and improving service to customers,” said Frederick W. Smith, chairman, president and chief executive officer of FedEx Corp., in a statement. “Our presence in Europe is backed by strong leadership and management and dedicated team members. We have an excellent strategy that has steadily advanced our position in the region, and we are well positioned for profitable growth as we increase the number of direct-served locations in Europe.”
This announcement comes shortly after Smith clearly stated FedEx would not make an offer for the TNT Express business soon after UPS announced last month that it will acquire TNT Express for roughly $6.77 billion ($5.16 billion euro).
He explained on the company’s March 22 fiscal third quarter earnings call that FedEx has a profitable multi-billion dollar business in Europe that is growing strongly.
“I am extremely pleased with our operations there and very confident in our plans to continue expansion, primarily through organic growth,” he said. “We believe these plans will continue to improve our competitiveness in Europe and further continue to contribute to profitable international growth.”
What’s more, Smith noted that even though FedEx is doing well there, growth rates in Europe are extremely low and are likely to continue to remain low as long as the policies being pursued in Europe remain the same as they have for the last 20-to-25 years, as well as in the U.S. These policies, he said, are not stimulative for GDP growth, aside from relatively low levels.
Among the inroads FedEx has made in recent years in Europe are:
-a 2006 purchase of ANC Holdings Limited, a UK domestic express transportation company;
-a 2007 rollout of its wholly-owned operation in Hungary following the acquisition its service provider Flying Cargo Hungary Kft.;
-the 2010 relocation of its Central and Eastern European hub from Frankfurt to Cologne, Germany and a 2009 expansion of its European hub at Roissy-Charles de Gaulle Airport in Paris, which is the largest non-U.S. FedEx hub; and
-in 2012 year-to-date FedEx Express has opened up 26 new stations in France, Germany, Italy, the Netherlands, Northern Ireland, and Sweden, coupled with FedEx Trade Networks opening up 22 locations in recent years.
“[This] is the kind of acquisition we like—small, bolt-on, adding to the global FedEx network with a new domestic service offering in Poland,” wrote Stifel Nicolaus analyst David Ross in a research note. “In 2011, FedEx did a couple similar deals, acquiring an increased domestic footprint in India with AFL and added to its domestic presence in Mexico with MultiPack. While UPS tries to figure out how to integrate its European operations with those of TNT, we prefer to own FedEx, which should have a much easier time growing with these smaller, less risky integrations.”
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