The agreement is between DHL and Polar Air Cargo Worldwide, a wholly owned unit of Atlas Air Worldwide Holdings (AAWW). DHL Express will have guaranteed access to aircraft capacity for the 20-year life of the partnership. Additional available aircraft capacity will be available from another subsidiary of AAWW, Atlas Air, Inc.
DHL will acquire a minority interest of 49% in Polar that will earn a 25% voting interest in the air carrier. The investment on DHL’s part is $150 million with an initial cash payment of $75 million when the deal closes and the remaining $75 million to be paid in two installments, on January 15, 2008 and November 17, 2008.
“The Trans-Pacific route is one of the most rapidly growing and competitive trade lanes globally,” says John Mullen, CEO of DHL’s Express division. “Adding capacity through an even stronger presence in the U.S. is a crucial factor in supporting our dynamic Asian business. Polar is the ideal partner to achieve that. Our long-term partnership will benefit both companies and enhance competition in the express delivery sector of the air cargo market.”
Subject to regulatory approvals and completion of definitive documentation, the transaction is expected to close in late 2006 or early 2007. Polar will continue to operate as an independent company. There will be no integration with DHL or any of its units.