The merger would allow FedEx to acquire an extensive ground network in Europe and Nigeria, making it a bigger player in the burgeoning e-commerce market.
Expanding in Europe and other overseas market including Nigeria is just one aspect of FedEx’s strategy to grow revenue and profit. Fedex aims to gain market share in the European market, especially in Europe’s fast growing e-commerce market. On similar terms, Red Star Express, a licensee of FedEx in Nigeria stands to gain from this merger as it will open up cost synergy opportunities.
This deal poses a formidable challenge to other players in the market. FedEx’s unmatched global air network and TNT’s road network in Europe could make this new entity the forerunner in the market. The Merger is the third-largest company in Europe's international express-delivery market behind DHL and UPS, and would "provide significant value to the employees, customers and shareholders of both companies, and even here in Nigeria”.
Red Star Express Plc., is a premium logistics solution provider in Nigeria in area of revenue, network coverage and market share in the domestic and international market. It enjoys a domestic strength of 169 offices in Nigeria, delivers to additional 1,500 communities, over 1400 highly trained personnel and over 500 vehicle fleet. It operates as the Nigerian licensee of FedEx, which is the world’s largest express transportation company, providing fast and reliable delivery to more than 220 countries and territories around the world.