Online retailer Amazon purchased a minority stake in American air cargo operator Air Transport Services Group.
Amazon acquired almost 13.5 million shares for $9.73 per share or 20% of Air Transport Services Group (ATSG) having spent $131 million on the deal which was concluded on March 8, 2021. In addition, the retailer received warrants in a cashless transaction that helped the company to gain an additional 866,000 shares of ATSG.
Amazon first received warrants to purchase ATSG shares in 2016. Under the agreement, ATSG started to operate an air cargo network to serve Amazon customers in the United States. The first agreement included the leasing of 20 Boeing 767 cargo jets to Amazon by ATSG for five years. In conjunction with the first commercial agreement, ATSG also granted Amazon warrants to acquire over a five-year period up to 19.9% of ATSG’s common shares, based on the closing price of ATSG shares at the time.
Amazon has also acquired warrants to purchase shares in Atlas Air Worldwide Holdings and Sun Country Airlines Holdings, two other carriers that operate Amazon Air jets. The recent purchase of the part of ATSG shares still needs to be approved by the US Department of Transportation.
On the way to becoming more independent from its contractors such as UPS and FedEx, in January 2021, Amazon announced its aim to buy 11 Boeing 767-300 jets to join the company’s air cargo division Amazon Air. According to Amazon, by the end of 2022, the Amazon Air fleet will have more than 85 leased and owned aircraft.