FedEx is targeting the British domestic express market with the GBP 120 million (EUR 179 million)acquisition of independent carrier ANC. The acquisition, marking increasing consolidation of the
British CEP sector, enables the US giant to offer one-stop domestic and international expressservices. But it is a major blow to previous UK partner, Business Post.FedEx is buying ANC from its management which had a combined 75% holding and LDC, the privateequity division of Lloyds TSB Group plc, which owned 25%. The management team led by CEO MarkGittins bought a 50% stake from Royal Bank of Scotland and HBOS in early 2006.
FedEx said that the acquisition will allow it to directly serve the entire UK domesticmarket, providing a broader range of shipping options and enhanced services. Up to now, FedEx hasoffered international express to and from the UK, while domestic distribution has been handledunder contract by independent carrier Business Post.
According to CEP-Research information, ANC is one of a number of medium-sized British CEPcarriers with a domestic market share of about 5%. With the acquisition, FedEx will move closer toUK market leaders DHL, TNT and UPS.
ANC, with annual revenues of more than GBP 145 million (EUR 216 million), offers a broadportfolio of same-day, next-day and deferred parcel deliveries as well as associated logisticsservices across Britain. It employs 4,500 people and operates a fleet of 2,200 vehicles from 80locations. ANC announced earlier this year that its revenue had risen from GBP 123 million in2004/2005 to GBP 133 million in 2005/2006.
Michael L. Ducker, president, International, FedEx Express, commented: “The addition of ANCsignificantly expands our service portfolio in the important UK market and underscores ourcontinuing commitment to grow the FedEx international business.”
Robert W. Elliott, president, Europe, Middle East, Africa and Indian subcontinent, FedExExpress, added: “As the UK market continues to evolve and expand, customers increasingly seek asingle provider of solutions for their domestic and international shipping to more efficientlymanage their global supply chains. This acquisition gives our customers access to broader businessand transportation services and supports the delivery of an outstanding customer experience eachand every day.”
ANC CEO Mark Gittins said: “The acquisition of ANC by FedEx, a world-class company known forits premium service and dedication to its people, presents new opportunities for our customers andemployees. Our two companies share similar values in providing an excellent customer experience,investing in our people and our commitment to being good corporate citizens.” ANC management willremain in place following the acquisition and report directly to Elliott.
JPMorgan Cazenove acted as financial adviser to FedEx Corporation on the transaction. KPMGadvised ANC Holdings Limited.
