FedEx plans to acquire Brazil-based transportation and logistics services provider

Company officials said that this deal represents the latest step in its strategy for profitable growth in Latin America, as well as enhance FedEx Express’ international and Brazil business offerings.

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FedEx announced earlier today that it has signed an agreement to acquire Rapidão Cometa Logistica e Transportes S.A., a Brazil-based transportation and logistics services provider.

Financial terms of the deal were not disclosed, and FedEx said that it expects it to be made official during the third quarter of this year. A company spokesman declined comment on how long this deal had been planned.

Company officials said that this deal represents the latest step in its strategy for profitable growth in Latin America, as well as enhance FedEx Express’ international and Brazil business offerings.

FedEx and Rapidão’s relationship goes back to 2001, during which time Rapidão has served one of FedEx’ authorized representatives in Brazil. FedEx noted that Rapidão will supplement FedEx Express’s Brazil-based service portfolio, with the company committed to growing in Latin America through key strategic investments.

“FedEx will now be able to provide a more comprehensive portfolio of services in Brazil, including international air express, domestic ground and value-added services such as supply chain and logistics solutions,” said Juan N. Cento, president, FedEx Express, Latin America and Caribbean, in an e-mail.

FedEx said that Rapidão will increase its Brazil-based footprint and bring various offerings to the company, including:
-45 operational branches and approximately 145 distribution points;
-approximately 770 vehicles and trailers;
-logistics and distribution, which consists of a wide range of products and services;
-a ground distribution network that provides day-definite transportation for small packages and heavyweight shipments; and
-approximately 9,000 employees across Brazil.

Once the deal is made official, FedEx said that the integration of the logistics, distribution and express businesses of Rapidão Cometa will be achieved in phases over a period of 18 to 24 months after closing “and will result in an extensive and competitive FedEx network and portfolio throughout Brazil.”

“After this transaction is completed, FedEx Express will be able to seamlessly offer all international services to Rapidão Cometa customers, who will have direct access to the FedEx international network connecting more than 220 countries and territories worldwide, enhancing customers’ business flexibility and speed to market,” a company spokesman said. “FedEx customers will have access to domestic package and freight services, logistics and distribution services.”

Robert W. Baird & Co. analyst Ben Hartford wrote in a research note that this deal
complements and expands Express’ footprint in emerging Latin America region, which he wrote is an important growth market for integrators like FedEx.
“Given FDX and Rapidão’s prior partnership, acquisition is a natural evolution in the partnership and consistent with FDX’s recent strategy of pursuing smaller tuck-in acquisition that support organic growth within FDX’s existing network,” noted Hartford.

Japan expansion: FedEx also recently announced that its FedEx Express subsidiary plans to roll out a new FedEx North Pacific Regional Hub at Kansai International Airport (KIX) in Osaka, Japan.

FedEx said this regional hub will serve as a consolidation point for shipments from northern Asia to the United States and will continue to operate as an international gateway for customers in western Japan.

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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