DHL buys stake in cargo operator
DHL's deal to buy 49% of Polar Air gives it access to capacity on flights in key global markets, including the Asia Pacific region.
DHL has agreed to pay US $150 million to acquire 49% of Polar Air Cargo Worldwide, a unit of Atlas Air Worldwide Holdings (AAWW). The deal includes a 20 year arrangement that will give DHL capacity on flights in key global markets, including the Asia Pacific region.
AAWW will take in potential revenue of $3.5 billion over the length of the agreement.
“This is a landmark transaction and exciting partnership for our company,” said William J. Flynn, president and CEO of AAWW. “Our strategy has been to maximise the value and potential of our scheduled-service business, and this transaction accomplishes that goal."
DHL aims to close the deal late this year or early next year. It will pay US $75 million in cash when the deal closes, plus $75 million to be paid in two instalments in January and November 2008. The success of the agreement will be reviewed at five year intervals.
“This key strategic partnership ensures we can meet the rapidly rising demand for air cargo capacities between the US and Asian destinations,” said John Mullen, CEO of DHL’s Express division.
"DHL Express is already the market leader in Asia and the partnership with Polar will help us offer even higher quality levels to customers, while at the same time improving profitability on the fast-growing routes between the U.S. and Asia."
Polar will continue to operate as an independent company and DHL has acquired only 25% of the company’s voting rights. Polar currently flies six Boeing 747-400 Freighters.