Toll Group has entered into a formal agreement with private equity company Allegro Funds for the sale of its Global Express business.
In a statement today, Toll said day-to-day operations will be unchanged in the meantime, with customers continuing to work with their existing Toll teams throughout the separation of Global Express from Toll Group.
Completion of the sale is subject to regulatory approvals and other customary closing conditions, with completion targeted for June 30, 2021.
Toll Group Chairman, John Mullen, said the sale marked an “exciting opportunity to build a profitable, sustainable company for the long term” by re-orienting around its key strengths and competitive advantage.”
“As an international business with a strong Australian heritage and significant Asian operations, the sale affords us the opportunity to invest in growing our operations across the Asia region while continuing to build on our strong competitive position in Australia – where it all began,” he said.
Toll Group Managing Director, Thomas Knudsen, said the team would seek to create an even more compelling offering for customers by drawing on the “strength, scale and expertise we’ve built over 125 years through new and innovative solutions that help us grow with our customers in what is a very different world.”
“In undertaking the sale, we’ll retain the scale and expertise to manage complex supply chains across diverse markets in our key markets in Asia-Pacific.”
Knudsen said that the changing operating environment – including shifting supply chain dynamics, the rise of eCommerce, and the continued rise of Asia as an economic powerhouse – presented exciting opportunities for Toll’s customers and employees.
“We’ll draw on our core capabilities, global reach and sector expertise – as well as our trusted relationships with customers, governments and the broader supply chain industry – to forge a new and exciting future for the business,” he said.
Meanwhile, the Transport Workers’ Union is urging Allegro to invest in the company to ensure its long-term survival in the face of gig economy entrants.
TWU National Secretary Michael Kaine said the union, which represents thousands of Toll workers, is ready to work with Allegro on a plan to maximise Toll’s strength but that significant investment is vital.
“The TWU stands ready to work with Allegro to ensure Toll Express’s position as a safe, sustainable transport industry leader but this will require significant investment given that parts of the business require upgrades and reform. Just like Virgin’s new owners, the TWU will hold Allegro to account every step of the way to protect the interests of those who matter most: Toll’s customers, workers and all road users who depend on Toll operating a safe transport business,” he said.
“Allegro must urgently invest in Toll given the threat being posed by gig economy entrants such as Amazon Flex, which sees workers using their own vehicles to transport goods with few minimum standards on safety and pay.
“Uber Freight and Amazon’s online freight system may also be on their way to Australia and the aggressive nature of these companies and their determination to undercut and wipe out competition will require Toll to lift standards, not lower them.”
Kaine also added that the sale of Toll is a timely reminder to the Federal Government of its tearing down of an independent tribunal investigating safety risks in trucking – exactly five years ago today.
“The ground-breaking nature of this tribunal was that it was holding wealthy retailers, manufacturers and oil companies to account to ensure that they were paying transport operators enough so that their goods could be delivered safely,” he said.
“Now that the check on these wealthy companies is gone we have a free-for-all in transport where the focus is on getting good transported cheaply not safely and this is costing lives on our roads. The result is transport operators delaying vital maintenance to trucks and drivers forced to speed, work long hours and skip mandatory rest breaks.”