In a move to expand globally, leading freight carrier
) is acquiring service provider, Supaswift and its subsidiaries
that offer FedEx Express international services in Southern
Africa. According to market reports, FedEx completed the first
phase of the acquisition, which included businesses in South
Africa, Malawi, Mozambique, Swaziland and Zambia. The company is
also contemplating the acquisition of Supaswift's businesses in
Botswana and Namibia.
The deal is expected to provide access to 7 markets in
Southern Africa with operations through 39 facilities and the
existing set up of 1,000 Supaswift's employees. The company
believes that the acquisition would translate into business
synergies arising from emerging markets like the African
We believe near-term earnings growth will be aided by
increasing profitability in Freight coupled with continued growth
in the Ground segment. Additionally, improving international
revenues and operational efficiency in FedEx Express will also
support earnings improvement, going forward.
FedEx is boosting its international business through
substantial investments to enhance its existing routes and make
strategic acquisitions. The company is building a new hub in
Guangzhou, China, to cater to 100 new Chinese cities within the
next five years. Recently, the company announced that it
will invest $100 million in China to strengthen its position in
the country against its rival -
United Parcel Service, Inc.
As for acquisitions, in 2012, the company took over Polish
courier company Opek Sp. z o.o. as well as French B2B Express
transportation company, TATEX. Soon after, the company acquired
Rapidão Cometa, a Brazilian transportation and logistics
We believe the investments in organic growth as well as
acquisitions will lead to greater operational efficiencies,
providing a competitive edge, generating significant long-term
synergies, supporting international business growth and driving
FedEx, which operates with the likes of
Air Transport Services Group, Inc.
Radiant Logistics, Inc.
) retains a Zacks Rank #3 (Hold).
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