Market Overview

FedEx To Acquire Israeli-Based Flying Cargo Group's International Express Business

FedEx To Acquire Israeli-Based Flying Cargo Group's International Express Business

FedEx Express, the air and international unit of FedEx Corp. (NYSE: FDX), has reached a conditional agreement to acquire the international express business of Flying Cargo Group, FedEx Express' long-standing Israeli agent. Flying Cargo Group is one of the most world's most iconic transportation and logistics agencies.

The agreement, which is subject to regulatory approval, is expected to close in the first half of 2019, the companies explained late yesterday. Until then, Flying Cargo's international express business and FedEx Express, which operates international services in Israel through its TNT Express operation, will function independently.

Flying Cargo will continue to own and operate the rest of its portfolio, which includes warehousing, fulfillment and intra-Israeli pick-up and delivery, the companies said.

Founded in 1982, Flying Cargo is considered the go-to transport agency in Israel, and has counted as customers many of the industry's leading firms. The Reik family, which still controls it, is one of the global industry's most well-known names. FedEx started working with Flying Cargo in 1990.

Israel is known for its production of technology and medical equipment, products strongly suited for air freight. Both are high-value commodities that often require the speed of air transport to expedite deliveries and to avoid the costly scenario of product obsolescence.

DHL Express, the largest global air express firm by market share, flies its own aircraft into and out of Israel. UPS Inc. (NYSE: UPS) does not operate its own planes to and from Israel. Instead it relies on partners that fly in the market, as well as passenger airlines that carry UPS packages in the lower-hold, or "bellies," of their airplanes.

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Posted-In: FedEx Corp. Freight FreightwavesEarnings News Global Markets General Best of Benzinga


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