agreed to buy Tianjin Datian W. Group's 50% share of their joint venture along with that company's domestic express network in China for $400 million.
The companies have had a joint arrangement since 1999. After the deal closes, FedEx will have about 6,000 workers in China.
"China is changing the world's economic landscape, and FedEx has been part of this great change since we established express operations in China more than 20 years ago," FedEx said in a press release Tuesday. "This strategic investment in the long-term growth of China will broaden and deepen our relationship by improving access to important markets, fueling economic development for years to come."
FedEx, based in Memphis, Tenn., and Atlanta-based rival
both have been trying to expand their presence in the Chinese market and improve their access to its surging economy.
Last summer, both parcel carriers said they intend to build cargo hubs in China. FedEx is planning to open its hub in December 2008 in the southern city of Guangzhou, replacing its existing Asia-Pacific hub at Subic Bay in the Philippines, while UPS is targeting a 2007 open for its hub in Shanghai.
Two European shippers,
of Germany and
of the Netherlands, also have active operations in China. FedEx has been operating in China since 1984. The company currently serves China with 23 weekly flights and plans to add three more in March.
Shares of FedEx were adding 13 cents to $100.39.