FedEx Corporation (FDX) has announced the acquisition of Polish courier company Opek Sp.z o.o (Opek). The financial terms of the deal were not disclosed.
The purchase of Opek will increase the access of FedEx Express, a unit of FedEx, into nationwide domestic ground network. Post acquisition, the annual revenue and shipments of FedEx Express is expected at $70 million and 12.5 million, respectively. FedEx is likely to benefit from the 44 hubs operated by Opek across Poland.
FedEx forayed into the Polish market in 1989. The latest acquisition represents another milestone for the company’s expansion in the European market. The company intends to expand its business organically and through small purchases in Europe. This effort will aid FedEx in better competing with United Parcel Service (UPS), which is spreading smartly in Europe through smaller acquisitions.
FedEx has a small presence in Europe with 3% market share compared to United Parcel Services, which would be enjoying around 16% market share in Europe post-TNT acquisition. In its effort to broaden the European exposure, FedEx purchased ANC Holdings Limited, a UK domestic express transportation company in 2006, and began its wholly owned operation in Hungary after acquiring its service provider Flying Cargo Hungary in 2007.
Additionally, FedEx Express expanded its European hub at Roissy-Charles de Gaulle Airport, Paris, France in 2009, making it the largest FedEx hub outside the United States. Further, the company reallocated its Central and Eastern European hub to Cologne, Germany from Frankfurt in 2010, and opened 26 new stations across France, Germany, Italy, the Netherlands, Northern Ireland and Sweden so far this year.
We are currently reiterating our long-term Neutral rating on FedEx. The stock retains a Zacks #3 Rank (Hold) for the short term.
FEDEX CORP (FDX): Free Stock Analysis Report
UTD PARCEL SRVC (UPS): Free Stock Analysis Report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment