SHANGHAI, China–FedEx Corporation says that its FedEx Express unit has signed an agreement with Tianjin Datian W. Group Co., Ltd. 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 US$400 million.
FedEx and DTW Group entered into a joint venture agreement in 1999. 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.
“China is changing the world’s economic landscape, and FedEx has been part of this great change since we established express operations in China more than 20 years ago,” said Frederick W. Smith, chairman, president and chief executive officer of FedEx Corp. “This strategic investment in the long-term growth of China will broaden and deepen our relationship by improving access to important markets, fueling economic development for years to come.”
“Since we began our partnership in 1999, FedEx and DTW have created a standard of service unparalleled in China,” said Wang Shusheng, chairman of the board and founder of DTW Group. “With China’s rapid growth, its entry into the World Trade Organization, and the transformation of the business climate, the marketplace in China is developing rapidly. We are confident that this move will help position the company and its employees to take advantage of future opportunities in China.”
DTW Group will continue to operate international freight forwarding, general cargo transport and merchandise distribution businesses. “This acquisition deepens our engagement with the China market. Our customers will benefit from seamless access to key areas worldwide, including China’s second and third tier cities,” said David L. Cunningham Jr., president, Asia Pacific, FedEx Express. “Cities outside the eastern seaboard, like Wuhan – which is itself twice the population of Los Angeles – are a crucial part of growing China’s economy and vital to the long-term growth of FedEx in this region.”