Amazon spends $131 million to take minority stake in air cargo contractor ATSG

Amazon has taken a minority stake in Air Transport Companies and products Physique of workers, an air freight accomplice that operates a indispensable half of the company’s lickety-split-increasing aviation logistics unit.

Amazon exercised warrants in ATSG that will allow it to impress about 13.5 million shares within the cargo airline at an issue stamp of $9.73 per half, or bigger than $131.9 million, ATSG acknowledged in an SEC filing Monday. As fragment of a separate settlement, Amazon moreover bought approximately 865,000 shares of ATSG, with out a cash exchanging fingers, the filing states.

Shares in ATSG climbed bigger than 4.9% in early afternoon shopping and selling Monday. Amazon shares were largely unmoved.

Amazon has owned warrants in ATSG since 2016. It become granted warrants as fragment of an settlement to lease 20 Boeing 767s from ATSG, one in every of its earliest affords with a cargo company to create out its burgeoning air swiftly. Amazon moreover owns warrants to obtain a minority stake in rival provider Atlas Air Worldwide Holdings.

Amazon’s air swiftly, launched in 2016, is a extreme fragment of its push to produce one- and two-day supply. The company peaceful relies on ATSG and Atlas Air to soar a gigantic share of its programs, but it completely has started to lift some air cargo operations in home, lending extra credence to the realization that Amazon Air also can someday rival FedEx and UPS.

In a indispensable for the company, Amazon in January bought 11 dilapidated Boeing 767-300 jets from Delta and WestJet. The company is scheduled to have interaction the veil later this year on its $1.5 billion air hub in northern Kentucky, which has capability for 100 Amazon-branded planes and is anticipated to take care of about 200 flights per day.

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