SingPost acquisition in FMH won’t improve its earnings

The Freight Management Holdings is already fully consolidated.

When SingPost said it will proceed with an accelerated acquisition of Freight Management Holdings, it will increase the postal services’ ownership but the transaction will not improve the earnings, an S&P Ratings bulletin showed.

“The acquisition will increase SingPost's ownership in FMH to 88% by the end of March 2023, but will not improve SingPost's earnings as FMH is already fully consolidated,” said SingPost.

The acquisition will also reaffirm SingPost’s strategy to transform into a logistics player and its expansion in Australia but it is still unsure whether this will create investments or additional debt.

S&P views the acquisition as credit neutral as their base case and adjusted debt already accounted for cash needs that may stem from the trigger of the put.