United States shipping and logistics company UPS has reached an agreement to buy Mexican delivery firm Estafeta.
The Atlanta-based company announced the planned purchase on Monday but didn’t disclose how much it would pay to acquire Estafeta. However, during an investor conference call on Tuesday morning, UPS CEO Carol Tomé said that the price would be above US $1 billion.
The deal is expected to be completed by the end of the year, provided regulatory approval is forthcoming.
“This acquisition is a key part of UPS’s ‘Better and Bolder’ strategy, aimed at becoming the world’s premium international small package and logistics provider,” the company said in a statement.
It said the purchase is “an evolution of a commercial agreement established between the two companies in 2020.”
“When the two companies are combined, customers can rely on UPS’s integrated solutions that link small package, healthcare logistics and end-to-end supply chain solutions, creating a differentiated ‘One UPS’ advantage,” UPS said.
Tomé said Monday that the company’s acquisition of Estafeta would give customers in Mexico “unprecedented access” to markets around the world.
“Global supply chains are shifting, Mexico’s role in global trade is growing, and Mexican SMB [small and medium-sized businesses] and manufacturing sectors are looking for reliable access to the U.S. market. There is no better way to capitalize on these trends than by combining the size and scale of UPS with Estafeta,” she said.
“As the shift to nearshoring continues, our combined business will give customers in Mexico unprecedented access to global markets with seamless service and greater efficiency,” Tomé added.
Jens P. Grimm, the president and CEO of Estafeta, said that the company he leads is “excited” to combine its “proud 45-year logistics legacy” and “expertise” with that of UPS, “a company that shares our values of service excellence, investing in people and community engagement.”
“Today’s announcement is a testament to the hard work and dedication of our people and the trust of all our customers, vendors and suppliers across Mexico,” he said.
“This is the right time to accelerate our growth, and UPS will help connect our customers to new, global opportunities, and strengthen the connection of Mexico’s growing economy to the rest of the world.”
The announcement of UPS’s plan to acquire Estafeta comes a month after the company revealed it had entered into an agreement to sell its Coyote Logistics business unit to transportation firm RXO.
Wells Fargo analysts said it was likely that UPS would put the proceeds from that sale — $1.025 billion — toward the acquisition of other companies.
Estafeta, according to the company’s website, is “a 100% Mexican logistics integrator” that was founded in 1979. The Mexico City-based company, established by German immigrant Gerd Grimm, says it was the first firm to offer “door-to-door courier and parcel services in Mexico.”
UPS, one of the world’s largest companies, had revenue of $91 billion in 2023. It employs more than half a million people around the world and delivers 22.3 million packages every day, according to the UPS website.
With reports from Bloomberg LÃnea, El Sol de México and El Financiero
