Deutsche Post reviving US air cargo ambition
Deutsche Post has quietly revived a plan to invest in the US air cargo industry which was dropped four years ago in the face of regulatory opposition.
The company last month acquired a 49 per cent stake in Miami-based Astar Air Cargo, which in turn launched an unsolicited bid for Ohio-based ABX Air. Both companies derive most of their business from long-term contracts with Deutsche Post subsidiary DHL.
The proposed deal follows years of wrangling over Deutsche Post’s role in the US air cargo business, which is subject to the same constraints over foreign ownership as passenger airlines.
DHL agreed to sell its 25 per cent stake in Astar – then known as DHL Airways – to a group of US investors in 2003 after rivals such as UPS and FedEx claimed it had broken the ownership laws.
DHL’s USD 1.05 billion purchase of Airborne Express was also subjected to similar scrutiny, and the air cargo company was spun off to shareholders and renamed ABX, while the German group kept the ground-based parcel business.
Astar, which is headed by former Northwest Airlines chief executive John Dasburg, also tried to acquire ABX in 2003, and the talks were revived last December before the Miami-based group last week made an unsolicited USD 7.75 a share proposal to acquire its rival, citing “unusual volume and pricing activity” in ABX stock.
ABX was asked to respond to a proposal which valued the company at USD 454 million. Its shares climbed 12 per cent in the wake of the announcement and were trading just above USD 8, fuelling speculation of a rival offer from management.
DHL said it expected no problems in securing regulatory backing for the two deals involving its suppliers.
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