Japan Post to Acquire Toll Holdings in U.S. $5.1 Billion Deal.

Barely two days after Japan's logistics giant, Kintetsu World Express acquired APL Logistics from Singapore's Neptune Orient Lines (NOL) for around 140 billion yen ($1.2 billion), Japan Post Holdings Co Ltd surprised the market with its largest ever deal this week, agreeing a
A$6.5 billion ($5.1 billion) takeover of Australian freight and logistics firm Toll Holdings Ltd.

Japan Post Holding’s President Taizo Nishimuro / company courtesy
Japan Post Holding’s President Taizo Nishimuro / company courtesy

The deal will give Japan Post a presence in 55 countries and a surge in earnings power ahead of a planned listing later this year, as it aims to become a leading international logistics and e-Commerce player as well as one of the world's biggest financial institutions. Under the deal, Toll will keep its name and current management, lead by chief executive Brian Kruger.

On its way to becoming a global player
"We have made a first step toward becoming a global logistics company. The days are over when logistics companies can survive by shutting themselves within Japan," Japan Post Holdings President Taizo Nishimuro told reporters in Tokyo.

The acquisition will put Japan Post in direct competition with DHL, FedEx and UPS, while in the Asia Pacific region it will compete directly with SingPost, which in the past years has acquired several logistics companies in the region and more recently received an investment backing from Chinese e-Commerce giant, Alibaba.

Powerful combination
Japan Post has total assets of some 295 trillion yen ($2.47 trillion) including its mail, banking and insurance service. The banking unit alone ranks 17th in the world, even though its overseas business is currently limited to joint operations in several Asian countries. It already owns Sankyu Logistics, which reportedly is the second largest contract logistics operator in the Asia-Pacific region.

"Together this will be a very powerful combination and one of the world's top five logistics companies," Toll chairman Ray Horsburgh said in a statement. Toll's ex-chief executive officer, Paul Little, who led the company's expansion into Asia and quit after 26 years in 2012, could be one of the biggest winners from the deal. He stands to make a A$325 million windfall from his 5 percent stake.

Melbourne-based Toll had been restructuring and putting assets up for sale after its Asian expansion exposed it to falling commodity prices and freight volumes. Last year, the company announced it wanted to sell A$100 million of assets.

The sale still has to be cleared by Australia's Foreign Investment Review Board.

Nol van Fenema

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