FEDEX Corp reportedly is in talks to buy part of Deutsche Post AG's DHL delivery business in the United States, which would help it challenge larger rival United Parcel Service Inc.
Seeking to cut losses in the competitive domestic delivery business, Deutsche Post may move to trim its DHL business in the US, without abandoning it completely, according to published reports.
Deutsche Post Chief Financial Officer John Allan was quoted by German newspaper Frankfurter Allgemeine Zeitung as saying that a total sale of DHL in the US is "very, very unlikely."
A deal could be in the works by May at the latest, according to the report.
A FedEx spokesperson declined to comment. And a DHL spokesman denied any plans by parent company Deutsche Post to sell its US delivery service.
"There is no question about our exiting the US business - a withdrawal can be completely ruled out," DHL spokesman Jonathan Baker told Memphis Business Journal.
Shares of FedEx rose US$1.45, or 1.64 percent, to US$89.96, bucking the move down in the overall market. UPS fell US$1.25, or 1.76 percent, to US$69.97.
Analyst Rick Paterson of UBS said FedEx does not really need DHL's US delivery assets, and that it simply has to wait for it to lose ground over time to eventually win over its domestic market share.
FedEx, however, would benefit if DHL allowed it to become the US distributor of its hefty package traffic originating in Europe and Asia, he said.