FedEx Corp, the global transportation and related business services, is on a move to consolidate its position within the exploding sub Saharan African market through an acquisition of a portfolio Supaswift business, an entity headquartered in South Africa and operating in a number of SADC countries.
The New York Stock Exchange listed entity, FedEx announced yesterday that it has reached an agreement to acquire businesses operated by its current service provider Supaswift in South Africa and four other countries, Malawi, Mozambique, Swaziland and Zambia. FedEx also said it was in discussions to acquire Supaswift’s businesses in Botswana and Namibia.
The transaction fits into the ensuing scramble for commercial opportunities across the African continent.
In its announcement FedEx noted that Africa is currently the world’s fastest growing continent. Over the next decade its GDP is expected to rise by an average of 6% a year. South Africa alone makes up 21% of Africa’s total GDP, and is home to most major businesses in this region.
Inter African trade is growing and so are communications needs. This comes with immense opportunities for businesses like FedEx, a globalised transportation, e-commerce and business services player with annual revenues of $44 billion. FedEx has representation in 22 countries across the world and employs more than 300 000 people.
The transaction can also be seen as projecting local entrepreneurial flair, one that is good enough to attract a global suitor. Supaswift started operations in South Africa in 1990 and has grown to have representation across seven SADC countries and employs about 1000 people. In 2005, Supaswift merged with MyExpress, which had been offering FedEx Express international services in Southern Africa since 1991. Having said that it is also worth noting that this may not be an easy transaction to bed down and the main challenge will be in the people’s factor. People can be unsettled by such transactions.
If and when the transaction goes through Supaswift will cease to be a service provider and will be integrated into FedEx Express. The transaction is subject to necessary regulatory approvals and customary closing conditions.
The announcement said “Once the acquisition is completed, FedEx Express will have direct access across the seven markets to 39 facilities and will welcome approximately 1000 of Supaswift’s team members, who will join the ranks of more than 300 000 FedEx team members globally”.
Frederick W. Smith, Chairman, President and Chief Executive Officer of FedEx Corp said “The acquisition of Supaswift’s businesses, once closed, will provide customers with greater access to some of the world’s most rapidly growing economies,”
“It is an important step in our international growth strategy and further strengthens our FedEx Express portfolio.”
Gerald P. Leary, President of FedEx Express Europe, Middle East, Indian Subcontinent and Africa, added “FedEx Express has been active in Africa since the early 1990’s, through a well-established network of Global Service Providers. This acquisition, once completed, will reaffirm our support to customers in this region.”
Supaswift CEO Andrew Lovell said “We are joining one of the most admired companies and best places to work globally. The transaction, once closed, will put us in a solid position to meet the growing needs of our customers, representing a common commitment to offer an enhanced service portfolio and superior quality to both current and prospective customers,”
The announcement said the integration of Supaswift’s businesses will commence once the transaction has been closed and is expected to be achieved gradually over a number of months.
Like our FB Page: https://www.facebook.com/pages/ujuh/455796514465721