Amazon.com (NASDAQ: AMZN) has taken a minority stake in cargo airline Air Transport Services Group (NASDAQ: ATSG), strengthening a strategic partnership in its fast-growing private air network that supports e-commerce fulfillment.
ATSG said in an SEC filing Monday that Amazon for the first time exercised warrants it held, paying $131 million to take a 19.5% share in the Wilmington, Ohio-based aircraft leasing and aviation services company.
Amazon is purchasing about 14.4 million shares in two transactions, which must be approved by the U.S. Department of Transportation, ATSG said. Its stock price increased a fraction during Tuesday trading.
The minority stake gives Amazon the right to appoint one member to ATSG’s board, Bloomberg reported. If Amazon Air leases more aircraft from ATSG and exercises warrants, it eventually could own up to 39.9% of the contract carrier. It received the warrants under deals struck in 2016 and 2018.
U.S. e-commerce sales skyrocketed 40% last year as people shifted spending to goods they could enjoy at home or outdoors instead of spending on services that were limited by restrictions on public gatherings. Analysts estimate e-commerce will grow about 20% this year, compared to about 13% compound annual growth prior to the pandemic.
To continue reading this article...
Already have an account? Sign In
Create a Free Account
No payment required
