Tag: FedEx

FedEx in talks to buy DHL stake

Posted by | Jan 25, 2008 | |

FedEx reportedly is in talks to buy all or part of Deutsche Post’s DHL delivery business in the U.S. in a deal that would help it challenge larger rival UPS.

Seeking to cut losses in the hyper-competitive domestic fast delivery business, Deutsche Post may move to trim its DHL business in the United States, without abandoning it completely, according to published reports on Friday.

Deutsche Post CFO John Allan was quoted by Frankfurter Allgemeine Zeitung, a German newspaper, that a total sale of DHL in the U.S. is “very, very unlikely.”

A deal could be in the works by May at the latest, according to the report.

Shares of FedEx rose 1.6% to end at USD89.96, bucking the move down in the overall market. UPS fell 1.8% to USD69.97.

A spokesman for Memphis-based FedEx didn’t return a phone call from MarketWatch.

Analyst Rick Paterson of UBS said FedEx doesn’t really need DHL’s U.S. delivery assets, and that it simply has to wait for it to lose ground over time to eventually win over its domestic market share.

FedEx, however, would benefit if DHL allowed it to become the U.S. distributor of its hefty package traffic originating in Europe and Asia, he said.

FedEx would have the edge in any talks because Deutsche Post is under pressure from shareholders to produce some kind of value for DHL.

A deal between DHL and UPS is less likely because of the “more contentious relationship” between the two giants overseas, he said.

One of the world’s largest delivery companies with 4,000 offices, DHL traces its roots to 1969 in the U.S. before being acquired by Deutsche Post in 2002.

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Deutsche Post studying restructuring

Posted by | Jan 25, 2008 | |

Deutsche Post is considering its options for retail bank Postbank and its loss-making DHL Express unit in the United States but has not reached any decisions, a source close to the supervisory board told Reuters on Friday.

“There are considerations, but no decisions yet,” the person said. A second source familiar with the matter confirmed this.

Deutsche Post is exploring ways to stem losses from DHL in the United States, where economic weakness has stalled its recovery as it tries to take on dominant domestic rivals UPS and FedEx.

The company said this week it would write down around 600 million euros (USD879 million) on the value of the business after previously abandoning a target to break even at DHL in the United States in 2009.

And Deutsche Post’s chief executive, Klaus Zumwinkel, has said the role of Postbank in the group could be considered following the deregulation of the German mail market at the start of 2008. Many banks are interested, Zumwinkel told analysts in November.
His comments have been taken as a signal in the market that the bank would be sold.

The Financial Times Deutschland said on Friday that Postbank would be merged with another bank and not sold, while Post is in talks with FedEx about the U.S. package delivery business.

Teaming up with FedEx in the domestic U.S. business whilst offering FedEx a joint venture in Europe to enable it to deepen its presence could be the “most elegant solution for the massive profitability problems of DHL in the U.S.”, ING analysts wrote.

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Deutsche Post plans EUR 600 million writedown in U.S.

Posted by | Jan 23, 2008 | |

Deutsche Post AG said it will write down the value of its DHL Express unit’s Americas division as it struggles to compete with United Parcel Service Inc. and FedEx Corp.

Deutsche Post will write down 600 million euros (USD 874 million) of assets such as aircraft, trucks and office equipment, reducing 2007 net income, Chief Financial Officer John Allan said on a conference call. The move won’t affect Deutsche Post’s plans to raise the dividend by 20 percent, he said.

Deutsche Post last year scrapped a 2009 deadline for DHL to break even in the Americas, and some investors have called for the Bonn-based company to shed the unit. The carrier’s willingness to keep the business on its books suggests it plans to stay in the U.S. market, said Tim Sailor, principal of Navigo Consulting Group, a Long Beach, California-based firm that advises parcel shippers.

The decision will disappoint investors who want DHL to sell the unit, Damian Brewer, an analyst at JPMorgan Chase & Co. in London, said in a note to clients.
The postal service bought the business in 2002 to expand its express-parcel delivery network and compete with Atlanta-based UPS and Memphis, Tennessee-based FedEx in their home market.

Deutsche Post yesterday reiterated plans for a 2007 dividend of 90 euro cents a share.
The postal service will contract with other companies to handle some information-technology operations, leading to savings of at least 1 billion euros over seven years, Allan said today. Details of the plan, including the contractor, will be released tomorrow.

Deutsche Post announced plans last November to raise at least 1 billion euros from the sale of property to raise cash and attract investors. The postal service has generated more than 350 million euros of that amount so far, Allan said.

Shares fell 0.86 euro to 20.22 euros in German trading. UPS rose 5.6 percent today in New York trading, the most in more than six years, while FedEx climbed 4.8 percent, the most since September 2005.

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FedEx Among ''Best Companies to Work For,'' says FORTUNE Magazine

Posted by | Jan 22, 2008 | |

FORTUNE magazine and the Great Places to Work Institute today pronounced FedEx as among the 100 Best Companies to Work For in the United States.

Motivated, committed team members providing the highest possible service levels is what separates us from the competition, Smith said. Putting people first makes very good business sense and is the right thing to do.

FedEx has been honored as one of the Best Companies to Work For in 10 of the past 11 years and was named to the Best Companies to Work For Hall of Fame in 2005. FedEx also has been consistently ranked in FORTUNEs Global Most Admired Companies and Americas Most Admired Companies lists since 2002 and 2001, respectively.

Of the companies honored this year, FedEx was:

– The largest employer on the 2008 Best Companies to Work For list;
– The only shipping company included;
– Recognized for its no-layoff philosophy and promoting from within;
– Noted for its diverse workforce;
– Ranked as 97th overall;

To pick the 100 Best Companies to Work for, FORTUNE works with Robert Levering and Milton Moskowitz of the Great Place to Work Institute to conduct the most extensive employee survey in corporate America.

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Appellate Court declines FedEx Ground request to appeal (U.S.)

Posted by | Jan 22, 2008 | |

In a decision received today, the United States Court of Appeals for the Seventh Circuit declined to hear the request of FedEx Ground, an operating unit of FedEx Corp. for interlocutory review of the class certification decision in the Kansas case pending before the United States District Court in Indiana. The decision had granted class certification on the Kansas state claims and a national ERISA claim.

The court did not rule on the validity of the contractor model and has not decided class certification in any other multi-district litigation case. FedEx Ground will continue to vigorously defend the MDL.

This procedural ruling does not change any aspect of the FedEx Ground operation and we will continue to provide the world-class service our customers have come to expect.

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