Deutsche Bahn to Buy Brink's BAX for $1.1 Billion (Update1) Nov. 16 (Bloomberg) -- Deut... Deutsche Bahn to Buy Brink's

Nov. 16 (Bloomberg) -- Deutsche Bahn AG, Germany's state- owned railroad, agreed to buy Brink's Co.'s BAX Global Inc. U.S. freight-delivery division for $1.1 billion as the German company expands its logistics business abroad.

Deutsche Bahn is acquiring a company with about $2.4 billion in annual sales that provides air, sea and land freight transportation. Net proceeds from the sale will reach $900 million, Richmond, Virginia-based Brink's said in a statement on PRNewswire.

``The sale of BAX Global represents an exciting opportunity for the BAX team to join with an industry leader that is committed to being a major long-term player in the field of freight transportation and logistics,'' Brink's President Michael Dan said in the statement.

Deutsche Bahn Chief Executive Hartmut Mehdorn wants to expand the railway outside traditional passenger and cargo rail services. The Berlin-based company paid 3.6 billion euros ($4.2 billion) in 2002 for Stinnes AG, a German trucking and logistics business. Boosting the transport and logistics unit, which accounted for 48 percent of 2004 sales, may help Mehdorn increase profit as he prepares the company for a possible share sale.

BAX management favored the Deutsche Bahn takeover because managers felt the railway's Schenker division and BAX would fit well together, Mehdorn said today at a press conference in Berlin.

The railway on Nov. 12 reported a nine-month profit of 200 million euros after interest expenses, compared with a year- earlier loss of 54 million euros, after Mehdorn reorganized the management board in March, cut costs and investment and offered low-priced tickets to spur demand. Revenue in the period increased 4.2 percent to 18.5 billion euros.

Another former German state-owned company, Deutsche Post AG, has expanded from carrying mail into logistics and express deliveries with $13 billion in acquisitions, including Airborne Inc. and DHL Worldwide Express. The company, which recently announced it would purchase Exel Plc, is preparing for the end of its letter monopoly in Germany that expires in 2007.

BAX Global, founded in 1972, operates 500 offices in 133 countries. Operating profit climbed to $56.2 million in 2004 from $3 million in 2003, according to the company's Web site. Richmond, Virginia-based Brink's gets 52 percent of its revenue from BAX Global. The unit is based in Irvine, California, and employs 12,000 people.

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