TNT buys Brazilian express delivery firm Mercurio
Dutch mail company TNT NV said on Wednesday it had acquired Brazilian firm Expresso Mercurio. Mercurio, the leader in Brazil's express delivery market, had revenues of about 190 million euros ($247.5 million) in 2006 and employs more than 6,000 people, TNT said.
"The acquisition provides TNT with an ideal platform to further develop an integrated South American road express network," it said. TNT did not disclose the price of the cash-funded transaction.
The Brazilian domestic express market is expected to show growth rates in the range of 10 to 15 percent in the coming years, TNT said. TNT is active in more than 200 countries and employs around 127,000 people.
Analysts said the deal was a positive move but also said it increased risk for TNT. "This is the third largest acquisition in an emerging market within the last year, after Hoau in China and Speedage in India," Rabo Securities said in a note.
"We believe the Latin American market provides TNT with an additional growth region, but also believe that it raises the risk profile, while it will probably also depress EBIT (earnings before interest and taxes) margins in the coming years as well," it added.
(Published by Reuters, January 10, 2007)