Australia Post is buying its airline partner Qantas out of the joint parcel venture, StarTrack, for A$408m ($420m USD) in cash.
The two companies launched door-to-door express parcels and freight firm StarTrack only five months ago, after merging the retail divisions of their subsidiaries Australian Air Express and Star Track Express.
But Australia Post said today it will acquire the 50% stake from Qantas to make it sole shareholder.
The deal remains subject to shareholder and regulatory approvals, and will not see any changes to current management or operations, the Post said.
The arrangements are expected to be concluded in the fourth quarter of 2012.
Australia Post intends to continue operating StarTrack as a standalone brand within the Group, it said.
As part of the agreement with the airline, Australia Post said it would sell off its 50% interest in the remaining air freight services division of Australian Air Express to Qantas. The Post said it was no longer seen as a core part of the business, but the relationship will continue since Australian Air Express provides air freight services for both StarTrack and Australia Post itself.
Meanwhile, Australia Post said StarTrack was a “key strategic investment”, and would offer “significant” more express freight capabilities to go along with the Post’s international and domestic parcels network.
Australia Post said along with StarTrack it would be able to offer a broad range of products to consumers, small and larger businesses.
Ahmed Fahour, managing director of Australia Post, said the deal was prompted by the growth in online shopping within Australia and the subsequent need for more “flexible, timely and cost effective” delivery solutions for consumers and businesses.
He said StarTrack provided infrastructure capabilities of “strategic and commercial benefit” for the Post, including access to a fully automated network, track-and-trace technology and line-haul services.
“Under single ownership, both Australia Post and Star Track will have a far more comprehensive offer to customers and the potential to unlock further value for our customers in the future,” he said.
Fahour added that Australia Post would have an “even closer commercial relationship” with Qantas following the deal. The two companies have held joint air freight ventures together since 2003.
Qantas said it was anticipating making a $30m profit on the deal.
Qantas Group CEO Alan Joyce said of the acquisition of Australian Air Express: “Through this acquisition we will be able to offer an integrated air freight product across domestic and international networks. By leveraging the best from both businesses and delivering efficiencies, we will provide a market leading service to our customers.”
Source: Post&Parcel/Australia Post/Qantas