AUSTRALIAN logistics giant Toll Holdings has emerged as a bumper acquisition for Japan Post, which last week signed a takeover deal worth $6.5 billion to bring the Toll brand under its ownership and management.
Toll, which current activities include servicing the Barrow Island supply base in Western Australia and various gold mine freight delivery contracts, signed off on a Scheme Implementation Deed late last week, enabling Japan Post to acquire 100% of the company.
Japan Post chief executive Toru Takahashi said the acquisition would reflect a positive growth partnership for both companies.
“Toll has a strong presence in the Asia-Pacific region, which has excellent logistics growth potential, and a portfolio that is balanced by business and region,” Mr Takahashi said in a recent statement.
“Toll engages in forwarding and third-party (contract) logistics operations overseas and has significant experience in multinational corporate management.
“Japan Post will position Toll as a platform for cultivating global business, leveraging that company’s expertise to expand Japan Post’s global logistics operations and revenues.
“We believe the combination of Japan Post and Toll will be a transformational transaction for both our companies and in partnership with Toll, we are starting a new chapter of looking outward and becoming a leading global player.”
As well as boosting Japan Post’s outlook, shareholders in Toll Holdings will also benefit from the takeover, with the Toll Board of Directors unanimously supporting a cash payment of $9.04 per share – a 53% premium to Toll’s three-month volume weighted average price.
Describing the acquisition as an important step by Japan Post to become a leading global logistics player, Toll chairman Ray Horsburgh said that the company would continue to operate under the Toll name.
“We are proud that Toll is a great Australian success story, having grown from small local origins in 1888 to this outstanding outcome today for Toll shareholders and employees. Critically, it will enhance our service to existing and new customers,” he said.
“Japan Post is one of the world’s leading postal and logistics companies and Toll is the largest independent logistics group in the Asia Pacific.
“Together, this will be a very powerful combination and one of the world’s top five logistics companies.”
Union challenges on horizon
Shortly after the acquisition of Toll by Japan Post was announced, the Transport Workers Union, of which around 80% of Toll truck drivers are thought to be members, voiced dissent about the takeover.
“Nowhere in the statement from Toll Holdings is there any mention of what the takeover would mean for workers,” TWU assistant national secretary Michael Kaine said in a press release.
Alleging that prior takeovers had resulted in ‘worsening conditions for workers’, Mr Kaine said the union sought assurance from the companies that would ensure working conditions were not disrupted.
The 40,000-strong workforce is largely covered by the Toll Group – TWU Enterprise Agreement 2013-2017, which provides for annual pay increases of more than 15% per annum.
The agreement does not specifically address workforce issues following acquisition, but Toll has allegedly provided verbal assurance for its workforce and agreed to meet with the TWU to discuss how the takeover would impact the company’s employees.
AMMA will update its members on future developments of any union challenge to the acquisition arrangements.