Qantas adds road freight venture
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Qantas has a strategy of growing its non-airline business.
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SYDNEY, Australia (CNN) -- Australian airline Qantas and its joint venture partner Australia Post are to pay Aust. $750 million ($555 million) for the road freight operator Star Track Express.
The consortium beat a list of contenders that included shipping and logistics group Patrick Corp., which owns 45 percent of rival airline Virgin Blue.
Other reported contenders for the business were DHL, Deutsche Post and Toll. Market expectations were for a price above $700 million.
Qantas CEO Geoff Dixon said Friday the acquisition was consistent with its strategy of growing its non-airline business.
About 90 percent of revenue for Star Track Express comes from express road freight -- primarily high-value, time-sensitive packaged goods. It also has warehousing and air express operations.
The company, set up in 1974, has depots in the key Australian cities of Sydney, Melbourne, Perth, Brisbane and Adelaide.
Government-owned Australia Post managing director Graeme John said it and Qantas would operate Star Track Express as a separate joint venture and retain its brand and management team.
Australia Post and Qantas already jointly operate Australian Air Express as a domestic express freight business.
The two companies said they would pay for the new business out of cash reserves and undrawn credit facilities.
