In a bid to strengthen its Freight Forwarding and Brokerage capabilities in the Latin American market, FedEx (NYSE:FDX) agreed to acquire Colombian freight forwarder, Cargex, and its affiliate Agencias de Aduanas Aduanamos S.A. Nivel 2.
Headquartered in Bogota, Cargex has a vast experience in the field of export management of perishable goods. Meanwhile, Agencias de Aduanas Aduanamo specializes in offering customs brokerage services.
Notably, the terms of the agreement were kept under wraps. Anticipated to close later in 2019, this deal is subjected to customary closing conditions and a Colombian regulatory filing.
Following the closure of the deal, Cargex would function as a subsidiary of the FDX Logistics’ (formerly known as FedEx Trade Networks) operating segment. The FedEx Logistics unit offers services pertaining to customs brokerage, and global ocean and air freight forwarding through FedEx Trade Networks Transport & Brokerage. Results of the FDX Logistics unit are reported under “Corporate, other and eliminations.”
The decision to acquire Cargex further highlights FedEx’s commitment toward expanding its footprint in the promising Latin American market. Notably, FedEx Express, the major revenue-generating unit of the company, recently announced a roundtrip Colombia-to-Miami flight to enhance connectivity with the Latin American market.
Zacks Rank & Key Picks
FDX carries a Zacks Rank #3 (Hold). Better-ranked stocks in the Zacks Transportation sector are Copa Holdings (NYSE: CPA), Delta Air Lines (NYSE:DAL) and GATX Corporation (NYSE: GATX). While Copa Holdings sports a Zacks Rank #1 (Strong Buy), Delta and GATX carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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