FedEx says it is in talks to possibly acquire France-based express transportation provider
FedEx said this morning it is in discussions about a potential plan to acquire TATEX, a France-based B2B express transportation company focused on heavy shipments. This potential deal follows FedEx’ early April acquisition of Poland-based courier company Opek Sp.Z o.o.
in the NewsInfor acquires Predictix E2open acquires point of sale analytics leader Orchestro Intelligrated co-founders win 2016 Ernst & Young Masters of Entrepreneurship award for Ohio Valley MHEFI announces call for nominations for 2017 awards Panjiva reports May has a bounce back month for global trade activity More News
FedEx said this morning it is in discussions about a potential plan to acquire TATEX, a France-based B2B express transportation company focused on heavy shipments.
This potential deal follows FedEx’ early April acquisition of Poland-based courier company Opek Sp.Z o.o. Financial terms of that deal were not disclosed. Company officials said that the Opek 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.
FedEx said in a statement that TATEX was established in 1976 and has more than 1,000 employees and a nationwide network which includes a central Hub near Paris and 35 stations including 6 regional hubs. It also added that TATEX carries more than 19 million parcels each year, representing an annual turnover of about 150 million Euros. And it provides a wide range of express and time-definite services for parcels and pallets of up to 800 kg in France and throughout the world. The majority of TATEX’s customers are in the high tech, spare parts, automotive and clothing industries.
FedEx officials were not available for additional comment at press time.
Both the completed Opek deal and the potential TATEX deal come fairly soon after FedEx’ biggest competitor, UPS, last month announced it will acquire TNT Express for roughly $6.77 billion ($5.16 billion euro).
FedEx Chairman, President and CEO Fred Smith said 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.
In an interview with LM, Jerry Hempstead, president of parcel consultancy Hempstead Consulting, said that FedEx has a long history of purchasing transport companies in Europe, which always have been very market focused acquisitions.
“Not all of them have worked out well, and FedEx has a lot more experience now discerning firms that will be a good fit,” said Hempstead. “A good piece of European transport is accomplished by niche firms. Much of the available business is within very defined geographic areas. Cherry picking is as valid a strategy as is buying an entire network like TNT. Both strategies can result in revenue and profit accretion if done well.”
Hempstead also pointed out that these types of European moves FedEx is making in buying smaller companies may have a much faster track to approval than the UPS / TNT deal and may not come with the union complications the UPS acquisition will face.
“There will be many more marriages as time progresses,” he explained. “We are just seeing the chess pieces lining up in tactical fashion before the economy begins to crank up again and these deals become more expensive.”
About the AuthorJeff 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
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
WMS Update: What do we need to run a WMS? Supply Chain Software Convergence: Synchronization Realized View More From this Issue