Amazon acquired a minority stake in Air Transport Services Group, an air freight partner that operates a significant part of the company’s rapidly growing aviation logistics unit.
Amazon has exercised guarantees at ASTG that will allow it to acquire approximately 13.5 million shares of the cargo airline at an exercise price of $ 9.73 per share, or more than $ 131.9 million, ASTG said in a SEC filing on Monday. As part of a separate agreement, Amazon also bought approximately 865,000 shares of ASTG, with no cash exchange, the document said.
ATSG shares were up more than 4.9% in early Monday afternoon. Amazon’s shares remained largely unchanged.
Amazon has had warrants on ATSG since 2016. Warrants have been awarded as part of an agreement to lease 20 ATSG Boeing 767s, one of the first agreements with a cargo company to build its growing airline fleet. Amazon also has guarantees to purchase a minority stake in rival carrier Atlas Air Worldwide Holdings.
Amazon’s air fleet, launched in 2016, is a critical part of its effort to deliver deliveries in one or two days. The company still relies on ASTG and Atlas Air to fly much of its packages, but has started to bring in some air cargo operations domestically, giving more credit to the belief that Amazon Air could one day rival FedEx and UPS.
For the first time for the company, Amazon purchased 11 used Boeing 767-300 jets from Delta and WestJet in January. Later this year, the company is expected to lift the veil of its $ 1.5 billion air hub in northern Kentucky, which has capacity for 100 Amazon-branded planes and is expected to operate about 200 flights a day.