TNT, a world leading logistics and express service provider, announced yesterday it is in the process of acquiring China's leading freight and parcels transportation operator HOAU Logistics Group.

Through this acquisition, TNT will become the largest privately owned transportation network for freight and parcels in China, said Ken Mccall, chief executive of TNT China, at a press conference in Shanghai.

The deal is expected to be completed by next year and McCall said TNT and HOAU have singed a Letter of Intent for this purpose.

Peter Bakker, chief executive of TNT, said the acquisition was a milestone for TNT to expand its presence in China where the logistics industry is still in its infancy.

"The acquisition being negotiated will be a significant step in our China strategy. It will help us realize our ambitions to build the largest transportation network in China for freight and parcels," said Bakker.

TNT China, with its regional headquarters in Shanghai, already operates the largest distribution network with 140 operating centres around the country.

Wang Zhenhua, president of HOAU, said he was pleased with the acquisition and was confident in the future prospects of the deal.

"Over the past 10 years, HOAU has built a strong and growing position in China," Wang said.

The acquisition was part of TNT's strategy to build its road transportation network in Asia, especially in China, a world-manufacturing hub with an increasing demand for logistics services.

The Netherlands based company has launched its door-to-door express delivery service in Asia, the first of the kind in the region.

Its road transportation network is currently being developed in Singapore, Malaysia and Thailand with a plan to expand this network to China in the next few years.

TNT sought a deal with HOAU following several unfruitful talks with other local logistics operators.

McCall said HOAU's comprehensive road network and its experience in China contributed to the success of the deal.

Established in 1995, HOAU, based in northeast China's Heilongjiang Province, has the largest privately owned road transportation network in China and is currently one of the leading road transportation companies for freight and parcels serving manufacturing and other types of clients.

HOAU has over 1,000 operating centres in the country and serves over 160,000 customers, dealing with various sectors from pharmaceuticals to high tech.

(China Daily December 7, 2005)