TNT announced the acquisition of 100% of LIT Cargo, a leading express delivery company in Chile. The acquisition gives TNT a strong nationwide road network in Chile and strengthens its position in the country's domestic express delivery market. Furthermore, it adds a key building block to the development of its South American Road Network (SARN). The acquisition fully fits with TNT's strategy to become the intra-regional express leader in South America and to leverage this regional strength to grow intercontinental flows.
LIT Cargo is a family-owned, profitable road express company that was founded in 1952. The company operates a nationwide, highly automated express parcel network, comprising of 55 depots and 496 vehicles. It employs 1,500 people. Complementing TNT's already strong international position in Chile, LIT Cargo's network will allow TNT to bring customers an integrated offering of road, air, international, domestic and cross-borders services to and from the country. LIT Cargo's compound annual revenue growth of 25% over the past three years has outpaced that of the Chilean market. The company serves several key vertical markets, including automotive, pharmaceuticals and high tech.
Marie-Christine Lombard, Group Managing Director Express, member of TNT's Board of Management, said: 'TNT is on its way to becoming the intra-regional express leader in South America. We are developing strong operational platforms in Chile and Brazil to offer customers an integrated portfolio of domestic, cross border and intercontinental services.'
'TNT's South American leadership strategy is a key component of the Group's emerging platform strategy,' Curtis Watson, Regional Managing Director, Latin America said. 'With the acquisition of LIT Cargo, TNT is showing a clear commitment to delivering on its emerging market strategy and is demonstrating its dominant position in the South American region.'
'This is also great news for our customers, as it enhances TNT's value proposition and meets clients' needs,' added Marcelo Perez, Country General Manager, Chile. 'Customers in Chile can now benefit from TNT's broad range of services and a fully integrated domestic and regional coverage via the first-to-market South American Road Network (SARN), linking Chile to Brazil and Argentina.
Before acquiring LIT Cargo, TNT was a leading provider of time-sensitive express distribution solutions in Chile, operating primarily in the international sector. The company started to service Chile in 1986 through an agent, and took ownership of its operations in 1995. It then started to operate in the domestic express market in 2002.
In Chile, the fast growing express domestic market is expected to increase at about 21% per annum (Compound Annual Growth Rate) during the next five years. Chile's economy is the most stable in the region, with strong and consistent growth of Gross Domestic Product (GDP) of over six% for the last few years. The country boasts a very stable and free economic environment through its numerous free trade agreements. Chile also has the lowest operational and financial risks in the region, which makes the country highly attractive for investments.
