FedEx Express to Acquire Express Business of Chinese Transportation Company DTW Group; Strategic Investment Boosts Long-Term Prospects for China and FedEx

The acquisition will include:

-- DTW Group's 50 percent share in the International Priority express joint venture, converting the joint venture into a wholly FedEx-owned company;

-- The DTW Group assets used to perform International Priority services; and

-- DTW Group domestic express assets from 89 DTW Group locations.

Upon closing, FedEx will employ more than 6,000 people in China.The transaction is subject to customary conditions, includinggovernment approvals and licensing.

"China is changing the world's economic landscape, and FedEx hasbeen part of this great change since we established express operationsin China more than 20 years ago," said Frederick W. Smith, chairman,president and chief executive officer of FedEx Corp. "This strategicinvestment in the long-term growth of China will broaden and deepenour relationship by improving access to important markets, fuelingeconomic development for years to come."

"Since we began our partnership in 1999, FedEx and DTW havecreated a standard of service unparalleled in China," said WangShusheng, chairman of the board and founder of DTW Group. "WithChina's rapid growth, its entry into the World Trade Organization, andthe transformation of the business climate, the marketplace in Chinais developing rapidly. We are confident that this move will helpposition the company and its employees to take advantage of futureopportunities in China." DTW Group will continue to operateinternational freight forwarding, general cargo transport andmerchandise distribution businesses.

"This acquisition deepens our engagement with the China market.Our customers will benefit from seamless access to key areasworldwide, including China's second and third tier cities," said DavidL. Cunningham Jr., president, Asia Pacific, FedEx Express. "Citiesoutside the eastern seaboard, like Wuhan - which is itself twice thepopulation of Los Angeles - are a crucial part of growing China'seconomy and vital to the long-term growth of FedEx in this region."

FedEx has embraced China's consistent progress in deregulating itsmarket under World Trade Organization protocols. Reliabletransportation networks are a critical part of the government'sdevelopment plan and, as wealth spreads, must extend beyond majorcities. The U.S.-China Business Council reported that a majority ofChina-based companies said gaps in China's transportation networksdiminished their competitiveness.

Earlier this month, China reported that exports in 2005 reached arecord US$762 billion, a year-over-year increase of 28 percent.Imports rose to US$660 billion, an increase of nearly 18 percent overthe previous year. Total foreign trade in 2005 exceeded US$1.4trillion, making China the world's third largest foreign tradingpower. It is the second largest domestic air cargo market in the worldand is expected to be the fastest-growing market for air cargo,averaging more than 10 percent growth per year between 2003 and 2023.

"China's economy is expected to continue its extended cycle ofstrong growth, thanks to the pivotal role it plays in the globalsupply chain," said Gene Huang, FedEx chief economist and Shanghainative. "China's solid manufacturing base is essential to neighboringAsian economies, which export key electronic components. Its emergingmiddle class and growing consumerism will continue to attract capitalgoods and luxury items from the rest of the world."

Benefits for China

With this acquisition, FedEx will build upon beneficial relationsit has established within China. The business experience gained fromoperating in this dynamic market will allow FedEx to better servelocal businesses with an expanded suite of transportation solutions.

In this expanded role, FedEx employees will be able to contributemore fully in the communities where they live and work in China. FedExhas contributed hundreds of thousands of dollars in shipping anddirect contributions to support causes such as health, education andthe arts in China.

China also will benefit from the FedEx tradition of recruitinglocal employees and training them for management positions. In 2005,FedEx was ranked among the Top Ten "Best Companies To Work For" inChina by Hewitt Associates. Of the FedEx Express-DTW Co., Ltd.managers in China, more than 80 percent are Chinese citizens.

FedEx: A history of leadership in China

This acquisition underscores the ongoing FedEx commitment to Chinaand bolsters FedEx leadership in the global, air cargo industry. Forexample, FedEx:

-- Was the first express air carrier to enter the market in 1984;

-- Was the first express carrier to directly serve China with its own aircraft in 1996;

-- Launched the express industry's first direct flight from mainland China to Europe in March 2005;

-- Initiated the first overnight express link between India and China in September 2005;

-- Was the first express transportation company to be linked electronically with China customs;

-- Currently serves China with 23 frequencies per week, the most of any cargo airline, and plans to add three more in March;

-- Connects more than 200 Chinese cities to the FedEx international network and plans to add 100 additional cities during the next few years;

-- Will employ more than 6,000 workers in China when the acquisition is complete; and

-- Earlier this month broke ground on a new US$150 million Asia Pacific hub in the southern China city of Guangzhou that will employ about 1,200 workers.

About FedEx Express

FedEx Express, a subsidiary of FedEx Corp., connects areas thatgenerate 90% of the world's gross domestic product in one to threebusiness days with door-to-door, customs-cleared service and amoney-back guarantee. The company's unmatched air route authoritiesand infrastructure make it the world's largest express transportationcompany, providing fast, reliable and time definite transportation ofapproximately 3.2 million packages to more than 220 countries andterritories each working day. FedEx Express has more than 140,000employees and has approximately 51,000 drop-off locations, 677aircraft and 43,000 motorized vehicles in its integrated, globalnetwork.

About FedEx Corp.

FedEx Corp. (NYSE: FDX) provides customers and businessesworldwide with a broad portfolio of transportation, e-commerce andbusiness services. With annual revenues of US$31 billion, the companyoffers integrated business applications through operating companiescompeting collectively and managed collaboratively, under therespected FedEx brands. Consistently ranked among the world's mostadmired and trusted employers, FedEx inspires its more than 260,000employees and contractors to remain "absolutely, positively" focusedon safety, the highest ethical and professional standards and theneeds of their customers and communities. For more information aboutthis acquisition, visit www.fedex.com.

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