Apollo Management LP has agreed to purchase the entire logistics operations of TNT NV for €1.48 billion ($1.89 billion). TNT will receive €15 million ($19 million) in the form of a 5% equity stake in the new company. Peter Bakker, CEO of TNT, said the transaction was an important milestone in the company’s Focus strategy announced in December 2005. At that time, the company said it would focus on its core competency of managing delivery networks (i.e. mail and express). The eventual sale of the logistics division was announced as part of that strategy and TNT began carrying it as “discontinued operations” in its financial reporting.
Though Bakker would say only that the equity stake TNT would retain in its former logistics division was an expression of confidence, the two operations each engage the services of the other to fulfill various operations. For TNT, mail will be its cornerstone, said Bakker, because that is where it generates its revenue. When the transaction is completed before year-end, TNT will be able to focus on continued investment to grow its platform, said Bakker.
Asia may be part of that growth strategy, according to Bakker, but there is little to acquire in Asia because there are currently no services like those TNT offers.
Addressing the recurrent rumor of a sale of TNT, Bakker declined comment saying he could never say never, but as a publicly traded company he is bound by rules that would not allow him to say “no.” The sale of the logistics division will strengthen TNT’s growth plans, he said.
Other operations such as freight management are being reviewed and, according to Bakker, a study announced in the second quarter to examine the role and relative synergies of freight management with express has not been completed.
Dave Kulik, currently head of the logistics division and a board member of TNT, will resign from the TNT board following the sale and become CEO of the new logistics company. Despite its 5% stake in the logistics company, TNT will have no management or governance role in the operations.
TNT’s Bakker would not name other prospective buyers, but he said that while price was important, so were growth prospects and continuity for the logistics operation.
Further background on TNT: