FedEx buys out joint venture in China
published: cw 04, 2006 in Mergers & acquisitionsGlobal express company FedEx Corporation has announced that its FedEx Express unit had signed an agreement with Tianjin Datian W. Group Co., Ltd. (DTW Group) to acquire DTW Group’s 50% share of the FedEx-DTW International Priority express joint venture and its domestic express network in China for US$400 million.
According to the company the acquisition will include DTW Group’s 50% share in the International Priority express joint venture, converting the joint venture into a wholly FedEx-owned company. In addition to this it will include the DTW Group assets used to perform International Priority services and DTW Group domestic express assets from 89 locations.
After completing the deal FedEx will employ more than 6,000 people in China. FedEx currently serves China with 23 frequencies per week and plans to add three more in March. Its network already connects around 200 Chinese cities and it plans to add an additional 100 during the next few years. Earlier in January it broke ground on a new US$150 million Asia Pacific hub in the southern China city of Guangzhou that will employ about 1,200 workers.
FedEx and DTW Group first entered into a joint venture agreement in 1999. Speculation over FedEx?s plans for its development in China had been increasing, especially given rival UPS? buy out of its joint venture with Sinotrans in 2005.
Source: Transport Intelligence
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