Not so fast..
UPS looks to China for M&A, downplays TNT talk | Deals | Reuters
UPS looks to China for M&A, downplays TNT talk
Mon Aug 11, 2008 11:48am BST
BEIJING (Reuters) - Top global logistics firm United Parcel Service hopes to buy a firm in China and boost staff there in coming years, and said on Monday that
paying billions for rival TNT would devalue its own shares.
UPS, a bellwether of the U.S. economy along with rival FedEx Corp, last month posted earnings in line with expectations but hit by rising fuel costs and a weak economy.
Trying to drive growth beyond a U.S. market that accounts for more than half its revenue, UPS will be opening two $180 million transport hubs in China and wants to nearly quadruple its staffing there in the next few years, hoping to serve growing demand for delivery services within a relatively untapped market.
"U.S. consumers are not buying, but I think the great opportunity for us internationally is business that never touches U.S. shores.," Dan Brutto, the president of the company's international business, told Reuters in an interview on Monday.
A TNT deal is "something that devalues our shares", he added. "But we always look at different things and try to fit into the puzzle."
Shares in TNT, Europe's No. 2 mail and logistics firm, leapt more than 6 percent on Monday after a Sunday Telegraph report that UPS was planning a 10 billion euro ($15.2 billion) bid.
UPS has doubled its headcount in China over the past 18 months to around 5,300, but expects that number to increase by at least 1,000 annually over the next 3-4 years, said Brutto.
It's now looking for acquisitions within the world's fourth largest economy, despite fears that Chinese growth will taper off over 2008 and 2009.
"You could say UPS China should really have 25,000 employees. The business is out there," Brutto said.
($=6.85 yuan)
(Reporting by Michael Wei and Kirby Chien, editing by Edwin Chan)