UPS revokes agreement with Estafeta
In a unexpected turn of events, United Parcel Service (UPS) has announced the cancellation of its planned acquisition of Mexican express delivery and logistics company Estafeta. The deal, which was announced in July 2024 and expected to close by the end of the year, did not proceed due to the companies' inability to satisfy all closing conditions.
UPS disclosed the turn of events in a filing with the Securities and Exchange Commission. The American logistics giant did not specify the reasons for the deal's failure to close. However, CEO Carol Tomé stated that efforts to acquire Estafeta were taking longer than expected to clear regulatory and pre-closing conditions.
Despite the cancellation of the Estafeta acquisition, UPS remains committed to growth in Mexico and delivering the reliable service its customers expect. To strengthen its presence in Mexico, UPS has announced the acquisition of the Mexican logistics and courier company Solistica.
The UPS-Estafeta deal aimed to help customers in Mexico and provide UPS customers with improved access to Mexico's market. With Solistica, UPS customers would still gain better access to Mexico through its expanded network. Solistica offers truckload, less-than-truckload, freight forwarding, distribution, customs brokerage, and express parcel delivery services.
The combination of UPS and Solistica would provide customers in Mexico with small package, healthcare logistics, and contract logistics services. This move aligns with UPS's efforts this year to conduct over 600 supply chain mapping assessments to help customers evaluate reshoring options.
UPS's decision to acquire Solistica instead of Estafeta was not solely based on the regulatory hurdles. The U.S.-China tensions were a factor considered in the deal's potential benefits. By acquiring Solistica, UPS said the deal allowed it to take advantage of Mexico's growing role in cross-border trade.
Mexican shippers would also gain better access to global markets through the UPS-Solistica merger. UPS remains optimistic about its growth prospects in Mexico and its ability to serve its customers effectively in the region.
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