Australia Post to go it alone

Australia Post to go it alone

Australia Post has decided to secure full ownership of Aramex Global Solutions (AGS), which provides end-to-end cross-border logistics solutions to a portfolio of iconic global e-commerce merchants.

Australia Post has reached in-principle agreement to purchase from its joint venture partner Aramex PJSC the 60% of AGS it does not already own for approximately US$20 million.

AGS has grown strongly since it was established by Australia Post and global express delivery and logistics company Aramex two years ago, with revenue up more than 60% since 2016 to approximately A$138 million* in 2018. Australia Post’s exclusive delivery of parcels for AGS in FY18 generated A$40 million of revenue.

AGS enables Australian consumers to shop online globally, connecting international retailers directly with Australia Post’s last-mile delivery and customs clearance capabilities. In addition to delivering significant parcel volumes inbound to Australia, AGS has an established presence in key global e-commerce trade lanes, including Asia, the UK, Europe and the US, providing a valuable platform for continued expansion.

Executive general manager international services Annette Carey said: “As a wholly-owned subsidiary of Australia Post, AGS provides an established platform to accelerate our international growth strategy.

“Combining our postal capabilities with AGS’s bespoke e-commerce capabilities enables Australia Post to engage directly with international retailers, providing unique customer service to capture strong growth in cross-border e-commerce markets.

“Today’s agreement with Aramex reflects changes to the strategic direction of both organisations, including Australia Post’s commitment to positioning itself as a global provider of cross-border e-commerce.”

The strength of cross-border e-commerce markets and a highly regarded management team, led by CEO Nabil Zaghloul have underpinned the growth of AGS, which is now handling more than two million international parcels a month.

“At AGS, we’re very excited to benefit from Australia Post’s culture, long-term vision and ongoing investment” said Mr Zaghloul. “Through partnerships with China Post and major Asian e-commerce marketplaces, we can leverage our platform into new markets.”

Transaction completion is expected to occur in the coming days. Australia Post has plans to rename and rebrand AGS to reflect the change in ownership in the near future.

* Reflective of revenue generated in the eleven months ended 30 November 2018 and an estimated revenue for December. Full year revenue is expected to be US$99m or c.A$138m. (AUD/USD = 0.7194 at 18 Dec 2018).

 

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