TNT said Thursday it plans to sell its air express business, completing the breakup of one of the world’s largest transportation companies in a move that could shake up the competition in the very tight market of international express operators.
The Netherlands-based company announced the planned sale at its annual meeting in Amsterdam, saying it would focus on its mail operations while selling a 70.1 percent stake in the express unit, one of the world’s top four international expedited services providers.
TNT set the stage for the sale earlier this year when the company announced plans to separate the mail and express divisions into separate companies, an internal separation TNT says will take place on Jan. 1, 2011.
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The “demerger” will have to be approved by shareholders at its annual meeting in May, the company said.
TNT said the action will allow both operations to advance strategies without the restraints of broader corporate interests. “The main reasons for separation are the increasingly divergent strategic profiles of the two units and the limited synergies existing between them,” TNT said in a statement.
A sale could have a dramatic impact on air express competition around the world.
FedEx and UPS have reportedly looked at the company as an acquisition target over the years. TNT is one of the largest express operators in Europe and has a strong foothold in Asia, but gave up a few years ago on establishing a strong presence in the United States.
The mail division, which runs postal operations in the Netherlands, is more profitable than the express unit, but it is tied up in tough and long-running labor negotiations.
Meantime, TNT CEO Peter Bakker said he will leave the company once the separation is completed. Bakker has been with the company for 20 years and overseen a splintering of operations that included the sale of the contract logistics business to a private equity firm – it is now CEVA Logistics – and the sale of TNT’s forwarding business to Geodis.