Tag: FedEx

FedEx Corporation announced today that its FedEx Express unit had signed an agreement with Tianjin Datian W. Group Co., Ltd. (“DTW Group”) to acquire DTW Group’s 50 percent share of the FedEx-DTW International Priority express joint venture and DTW Group’s domestic express network in China for USD400 million.

FedEx and DTW Group entered into a joint venture agreement in 1999. JPMorgan acted as exclusive financial advisor to FedEx. PricewaterhouseCoopers acted as exclusive financial advisor to DTW Group. The acquisition will include:

• DTW Group’s 50 percent share in the International Priority express joint venture, converting the joint venture into a wholly FedEx-owned company;

• The DTW Group assets used to perform International Priority services; and

• DTW Group domestic express assets from 89 DTW Group locations.

Upon closing, FedEx will employ more than 6,000 people in China. The transaction is subject to customary conditions, including government approvals and licensing.

DTW Group will continue to operate international freight forwarding, general cargo transport and merchandise distribution businesses.

The U.S.-China Business Council reported that a majority of China-based companies said gaps in China’s transportation networks diminished their competitiveness. Earlier this month, China reported that exports in 2005 reached a record USD762 billion, a year-over-year increase of 28 percent. Imports rose to USD660 billion, an increase of nearly 18 percent over the previous year. Total foreign trade in 2005 exceeded USD1.4 trillion, making China the world’s third largest foreign trading power.

It is the second largest domestic air cargo market in the world and is expected to be the fastest-growing market for air cargo, averaging more than 10 percent growth per year between 2003 and 2023.