By Ross Kelly
SYDNEY--Japan's state postal service agreed to buy Australian
logistics firm Toll Holdings Ltd. for 6.49 billion Australian
dollars (US$5.07 billion), as it seeks to further boost its
global-distribution network ahead of a share-market listing.
Japan Post Holdings Co. has for a while been looking to expand
into fast-growing Asian markets to help offset weaker conditions at
home--where population growth is slowing and Japanese people are
increasingly communicating through email and other electronic
messaging systems instead of writing letters processed by the post
office.
Last year, Japan Post launched an international parcel-delivery
service through a joint venture with France's GeoPost SA and Hong
Kong-based Lenton Group Ltd., a move that brought it more directly
into competition with global logistics giants such as UPS and FedEx
Corp.
In a statement Wednesday, Japan Post said buying Toll would help
diversify its revenue, as well as boost its enterprise value ahead
of the planned listing, which the Japanese government hopes will
provide cash to help finance reconstruction following the March
2011 earthquake and tsunami.
"Toll has a strong presence in the Asia-Pacific region, which
has excellent logistics growth potential, and a portfolio that is
balanced by business and region," Japan Post said.
Toll's business has been weighed down for several years by a
sharp slowdown in investment in Australia's mining industry, which
has crimped demand from resource companies for its freight
services. Its shares have tracked sideways for the past six
years.
The Melbourne company, which traces its roots back to 1888, has
also struggled to gain traction in competitive Asian markets. In
November, Toll said it would try to sell loss-making and unwanted
assets in an effort to turn its performance around.
The logistics company has urged its shareholders to accept
Japan's Posts offer of A$9.04 a Toll share, which represents a 49%
premium to its last closing price of A$6.08 a share. "Together,
this will be a very powerful combination and one of the world's
top-five logistics companies," Chairman Ray Horsburgh said.
The Japanese government owns all of Japan Post, which in turn
wholly owns its postal, banking and insurance units. Government
officials have said that they hope to raise tens of billions of
dollars from the partial IPO, which is scheduled to kick off toward
the end of this year.
Write to Ross Kelly at ross.kelly@wsj.com
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