Japan Post to buy Toll Holdings for $5.1bn

<p>The deal would create the world’s fifth-largest logistics group.</p>

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.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.