FedEx Corporation
(
FDX
) has closed the TATEX Express buyout, which was proposed in April.
French-based TATEX Express provides courier and express transport
services to industrial customers across Europe and international
markets.
Although the terms of the deal remain undisclosed, we expect
FedEx to gain from the proven market position of TATEX.
Annual shipments of TATEX come to 19 million parcels,
accounting for 150 million Euros in sales revenue.
Additionally, FedEx recently wrapped up its acquisition of
Brazilian transport and logistics company, Rapidao Cometa. With
$500 million annual revenues (as of 2011), 770 vehicles and 145
distribution centers, Rapidao Cometa remains a strategic fit for
FedEx to strengthen its Brazilian footprint and is concurrent with
its plan to expand in Latin America and the Caribbean markets.
We believe that the acquisition strategy of FedEx remains
impressive as these takeovers will enable the company to spread in
a variety of target markets. We foresee potential opportunities not
only in Europe but also in emerging markets like China, India,
Japan and Brazil, as well as other Asian regions for international
growth.
Prior to these acquisitions, FedEx acquired Polish company, Opek
Sp.z o.o, which is estimated to garner annual revenue and shipments
of $70 million and 12.5 million, respectively.
However, it is difficult to quantify the near-term financial
gains that the company will derive out of its recent expansion
initiatives, particularly in Europe, where sovereign debt concerns
could significantly weigh on the economic recovery. Moreover, the
company faces stiff competition from
United Parcel Service
(
UPS
). However, long-term prospects of these acquisitions look
promising.
Currently, FedEx retains a Zacks #3 Rank (short-term Hold
recommendation). We also reiterate our long-term Neutral rating on
the stock.
FEDEX CORP (FDX): Free Stock Analysis Report
UTD PARCEL SRVC (UPS): Free Stock Analysis
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