Japan Post to acquire Toll Holdings for USD 6.5 billion

Toll Holdings recommended investors to accept a cash takeover offer of USD 9.04 per share from Japan Post, a 49% premium to the stocks Tuesday closing price of USD 6.08, smh.com.au reports. Tolls biggest single shareholder (5.2%), former chief executive Paul Little, backed the proposed deal. Japan Post, which has USD 29.7 billion in annual revenues is owned by the Japanese government and was previously ranked 8th in the world, behind DB Schenker, La Poste and Kuehne + Nagel.

Japan Post will use the Toll acquisition to reduce its reliance on income from domestic postal services and increase income from global parcel deliveries by accessing Tolls extensive multinational transport network. Toll operates about 25,000 vehicles and 48 aircraft in more than 50 countries and transports a wide range of goods, including clothing, supermarket supplies, machinery and auto parts.

Tolls Australian online delivery service is expected to benefit from technology and transport management systems developed by Japan Post. Toll also plans to take advantage of Japan Posts customers. Although Toll has more than 4000 staff based in Japan, the company does not handle packages transported between Japan and Australia. Toll received an indicative proposal from Japan Post in early January 2015 and allowed the Japanese company to do limited due diligence before receiving a binding offer in February 2015.

The acquisition will require 75% of the shares voted at the investor meeting to be cast in favour of the proposal for the deal to go through. The deal also requires regulatory approval from Australias Foreign Investment Review Board.