TNT eyeing Overnite Express

After acquiring express cargo firm Speedage Express Cargo Services, Dutch company TNT NV is now eyeing courier firm Overnite Express Ltd. According to industry sources, the Dutch postal services giant has put a price tag of Rs 225 crore for the New Delhi-based courier and cargo company, which has a turnover of Rs 110 crore, has 1,000 offices and provides delivery solutions in over 800 destinations. Overnite Express, which began operations in 1987, also has an international service network covering more than 1,000 cities. According to sources, the buyout will enable the Dutch major, which has already expanded its presence in the surface express segment through Speedage, to capture substantial market share in the courier segment. But TNT India managing director Abhik Mitra denied the development, saying; “We are currently busy with the transformation and integration of Speedage.”

Cargo and logistics multinationals are looking at growing their businesses inorganically in order to quickly expand reach in India and tap emerging opportunities. Germany-based DHL Express has also grown in India through using the same route. It bought Blue Dart Express, which is into both courier and express cargo. US major FedEx recently acquired Prakash Airfreight, another courier firm. Its peer UPS, however, is yet to draw up a major India plan. “All these companies would like to operate in both the courier and the surface business in India. So, it won’t be surprising if FedEx is on a lookout for a cargo express firm,” said an analyst. He says it makes sense for a multinational to grow through buyout as it takes less time than through the organic process, which costs more, too. “With the yields in India not as good as in the developed markets, it would be best for them to not spend huge amounts of money on setting up world-class facilities. It would take a long time to recover such costs,” the analyst added.

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