TNT sells China road distribution business

TNT Express NV, the Dutch international express delivery company, on Thursday announced the sale of its domestic road operations in China to private equity funds under the management of Citic PE.

The transaction is expected to be completed in the second half of the year.

TNT-Hoau, the wholly owned subsidiary of TNT in China, is one of China's leading domestic road distribution service providers. It operates a domestic road distribution network with about 1,500 depots covering more than 600 cities. TNT Express acquired Hoau in 2007.

"The fierce competition between local courier distributors makes it almost impossible to make a profit. TNT Express' decision should be seen amid such a background," said Li Lei, an industrial analyst from Minzu Securities.

"In the past few years, Hoau has transformed itself into a leading nationwide operator in China. The change of ownership secures the ongoing growth and development of the company," said TNT Express interim CEO Bernard Bot.

TNT Express will now focus on offering international services to and from China. TNT International Express has a network of 36 depots across the Chinese mainland and three international gateways in Beijing, Shanghai, and Shenzhen.