TNT considers selling off unit Freight Management

TNT, the Dutch post group, said yesterday it might sell its freight management activities, in addition to the contract logistics business that a private equity group is close to buying.

The future of the former Wilson business – a Nordic freight forwarding company bought for Euros 257m (Dollars 328m) two years ago – is dependent on synergies with TNT’s express division.

It has been run as partof TNT’s logistics arm, offering air and sea transport as part of supply chain management.

But the decision to sell logistics – where margins have failed to meet expectations – meant the global freight management unit needed to be combined with express activities, which operate on a regional basis.

Linking them and finding savings might therefore prove difficult, said Peter Bakker, TNT chief executive.

He said TNT would publish the result of analysis to determine the potential for synergies in the current quarter. “If that (process) is not successful, then other scenarios open up,” Mr Bakker said, adding that these included selling the business.

Freight management contributed less than 10 per cent of second-quarter sales of Euros 2.64bn, up 5.8 per cent from a year ago, excluding logistics.

Mr Bakker said the logistics division sale would be completed by the end of the third quarter.

Apollo Management, the private equity company, and PAI, the European buy-out house, are two of three private equity groups in talks to take over the unit, according to people close to the process. Analysts estimate it could fetch between Euros 1.3bn and Euros 1.8bn.

Sales from logistics fell 2.9 per cent to Euros 882m, reflecting the earlier saleof activities in France, with operating income 21 per cent lower at Euros 27m, due to related costs.