FedEx may acquire local partner Datian soon
FedEx Express, a subsidiary of Fedex Corp (NYSE FDX), may acquire its local partner Tianjin Datian W Group soon, becoming the second US express service provider to go solo in China as the market opens up, the Economic Observer reported.
The newspaper said FedEx Express China chief Eddy Chan denied that any such plans were being considered but it quoted sources as saying that FedEx has hired Baker & McKenzie as its legal adviser for a possible takeover.
The newspaper did not give any timeframe for the deal or provide possible financial details.
FedEx rival United Parcel Service Inc (NYSE UPS) has already bought out its local partner Sinotrans, paying 100 mln usd to end a 16-year relationship.
China will allow freight forwarders to set up wholly-owned units by December of this year in accordance with its commitments to the World Trade Organization.
Under the agreement announced last December, UPS took direct control over agency operations from Sinotrans in five major cities. It will then add another 18 locations which cover over 200 cities by the end of this year.
FedEx has been planning a similar move to take direct control of Datian’s 69 branches in over 192 cities, and further boost it presence in the country, the paper said.
FedEx last week started the express air cargo industry’s first direct service from mainland China to Europe, providing daily flight from Shanghai to Frankfurt.
The new connection will double its air cargo capacity on westbound flights from Asia to Europe, adding approximately 850,000 pounds of capacity, and would also extend cut-off times for cities in eastern China by up to six hours, FedEx said in a statement.
