Japan Post to buy Toll Holdings for 5 1bn

The deal would create the world’s fifth-largest logistics group.

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By :  ,  Financial Analyst

Government owned financial firm Japan Post has announced it is spending $5.1 billion (£3.3 billion) to purchase Australia's largest freight and logistics firm Toll Holdings.

Under the deal, Toll will retain its name and run as a division under Japan Post. The company said there would be no major job cuts at the Australian firm.

"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 today (February 18th).

Toll's board said the $9.04 Australian dollars (£4.60) offer price was a 49 per cent premium to yesterday's closing price of A$6.08.

A presence in 55 countries

Japan Post said the acquisition would help it step up mergers and acquisitions throughout Asia, Europe and North America. It would give the company access to 55 countries.

"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 Reuters.

Combined, the two would be the world's fifth-largest logistics group after FedEx Corp in terms of revenue, Japan Post said.

Japan Post has total assets of $2.47 trillion including its mail, banking and insurance service. Toll shares rose 47 per cent after the deal's announcement today, helping push the broader Australian market one per cent higher, and the Australian dollar one per cent higher against the yen.

The deal comes as it emerged that Toll posted a 22 per cent fall in half-year net profit. However, it still has to be cleared by Australia's Foreign Investment Review Board.

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