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The German shipping giant DHL Global Forwarding is buying FC (Flying Cargo) International Transportation Ltd, the International Freight Forwarding unit from the privately owned Flying Cargo Group, the latter said today. The deal, which a sector source has valued in the tens of millions of dollars, still needs antitrust approval.

"Change of ownership carries substantial long-term advantages for the Israeli market in general and the company's customers in particular. We definitely see the decision of DHL, a leading logistics company, to buy our international forwarding company as an expression of a high level of confidence in the company, its employees and the Israeli market," Dany Reik, founder and co-owner of the group along with Avi Reik, said Monday.

The Reik brothers founded Flying Cargo 25 years ago. The group includes companies involved in various areas of supply-chain operations: international forwarding (the company being sold), logistics, storage, express shipping and local distribution, overland shipping, airline outsourcing services for handling of cargo, and outsourcing services for cargo insurance.

The company has 530 employees and in 2006 made revenues of NIS 900 million.

Under the agreement, the Reik brothers will continue to head the company for at least two years, and will report directly to the DHL board. The management team of Flying Cargo International Transportation, headed by Alvin Cohen, will remain in place.

"We are very pleased that we have managed to reach agreement to acquire this business. Israel is an attractive market with consistent economic growth and Flying Cargo International Transportation is the clear market leader. We are confident that adding them to our global network is the right step for us," said Chris Fahy, CEO of DHL.

The sale became public after DHL Express Shipping announced yesterday that its service would be expanded to include the U.S. as part of a three-year strategic plan to upgrade its infrastructure and expand its presence in the United States. The company has invested $1.2 billion in infrastructure, and has six international sorting centers in the U.S.

DHL specializes in express forwarding and logistics services. The company connects more than 220 countries, and has about 285,000 employees. The firm is wholly owned by Germany's Deutsche Post World Net , and its turnover in 2006 totaled about 60 billion euros. The company operates a branch in Israel.