FedEx likely to take stake in Hermes

While for some companies the coronavirus-driven crisis is a calamity, for others it is an opportunity to expand their businesses. Weak and small enterprises go bankrupt. Even firms with a long operating history can barely keep their head above water. In such a time, the market giants are prospering. They buy weak but budding companies at a lower price or take a stake in foreign corporations. For instance, US logistics company FedEx Corp intends to take a stake in German parcel delivery firm Hermes. Delivery companies are now facing the problem of the shortage of goods. Cargo delivery over the world has almost stopped, whereas home deliveries are surging as consumers prefer online shopping amid store closures and physical distancing measures. FedEx has a limited presence in the European parcel sector. The deal with Hermes will be a gateway to the local delivery market. However, some experts doubt that a tie-up with Hermes could create some efficiencies, and the deal is not without risks. Hermes had double-digit losses in 2019. Now the company is again struggling with a serious shortage of labor force, drivers in particular. However, FedEx is not discouraged by this fact. Last month, the company said that it could resort to new borrowing if needed. It appears that both parties are willing to cooperate and conclude a deal.