FedEx to acquire Supaswift in bid to expand Africa presence

Washington DC
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FedEx is in the process of acquiring shipping businesses in seven southern African countries from Supaswift, a FedEx service provider based in South Africa.

Memphis-based FedEx says in a media release it has already signed agreements to acquire Supaswift companies in five countries: South Africa, Malawi, Mozambique, Swaziland the Zambia.

In addition, FedEx is holding talks to acquire Supaswift companies in Botswana and Namibia, FedEx says.

The acquisitions will operate under the FedEx Express business and are subject to regulatory approvals and closing conditions, says FedEx.

FedEx says the deal will give it a "complete suite" of international and domestic shipping services to and from southern Africa and connect the region to more than 200 countries and territories worldwide.

The integration will happen gradually over a "number of months" once the deal closes, the company says.

It is unclear if FedEx plans to further bolster its African services or operate additional aircraft to the continent, and the company did not immediately return a call requesting additional information.

"The acquisition of Supaswift's businesses, once closed, will provide customers with greater access to some of the world's most rapidly growing economies," says FedEx chief executive Frederick Smith in FedEx's release. "It is an important step in our international growth strategy and further strengthens our FedEx Express portfolio."

Supaswift is a "licensee" of FedEx and has some 1,000 employees and 39 facilities, says the media release.

Supaswift launched in South Africa in 1990 and in 2005 merged with MyExpress Pty, which had provided FedEx Express international services in South Africa since 1991.

The acquisition announcement comes one day after Smith told investors that FedEx seeks to boost its international economy shipping business to take advantage of surging demand.

He made his comments to investors and reporters during FedEx's 19 June earnings call for the fourth quarter of fiscal year 2013, which ended 31 May.

Smith says demand for higher-yielding priority international shipping continues to wane, but demand for less-profitable economy shipping has surged.

FedEx's revenue from priority international shipping in the fourth quarter declined 4% year-over-year, while revenue from economy international shipping climbed roughly 10%.