The Nikkei reported last week that Japan Post had announced that it was going to “sell-off units of Australian logistics company Toll”. The announcement appears to have been just in Japanese and it is unclear what the details were.
Matters have become a little clearer this week, with Nikkei now reporting that “Japan Post will keep Toll’s international business, including contracted corporate logistics, which is expected to grow in Asia”. This implies that the rest will go.
Supposed leaks around the sale process have highlighted the importance of the ‘Global Express’ to the wider Toll Group. The investment banks J.P.Morgan and Nomura, who have been employed to handle the sale, are cited as estimating the worth of Global Express as being AUS$3.2bn in what appear to be pitching presentations for potential buyers of the business. Japan Post bought the Toll Group in 2015 for AUS$6.5bn.
It is unclear what action has been taken to sell the rest of the Group’s operations, notably its road freight activities in Australia and New Zealand, intermodal forwarding and businesses providing mining logistics. The Financial Times reports that the sale of road freight and warehousing assets in the US has already taken place, however, there is no confirmation of this. Whilst these may be regarded as peripheral assets to the core Australasian and Asia-Pacific operations, it does suggest that Japan Post is looking for a more aggressive break-up of Toll than has been suggested by Toll’s senior management.
It seems that the sale process is very much being run from Tokyo rather than Sydney, although visibility on Japan Post’s perspective is not strong. The Japanese management seemed to be suggesting last week that they would retain Toll Global Logistics and Toll Forwarding. Of course, one problem will be the opportunity to sell the Group at a reasonable price. Whilst the market opportunities may be reasonable, the experience of the Group implies that there have been problems with management effectiveness at some of the Australian operations. Japan Post may feel they have no alternative but to continue with the Australian businesses.
Source: Transport Intelligence, November 12, 2020.
Author: Thomas Cullen