UPS forms new business unit

ATLANTA (May 25, 2001) — United Parcel Service said Thursday it was forming a new business unit to handle freight forwarding and customs brokerage as it completed its $437 million acquisition of the Fritz Companies Inc.

The new division, which has not been named, will include San Francisco-based Fritz and seven smaller companies UPS has acquired over the last 18 months.

UPS said the new division will be the largest freight forwarding and customs broker in the industry, with annual revenue of $750 million. It will be headed by David Abney, a 27-year UPS employee.

Fritz shareholders approved the UPS deal Wednesday and will receive 0.2 shares of UPS common stock.

UPS shares fell 3 cents to close at $59.20 Thursday on the New York Stock Exchange.

Fritz owns and operates 400 facilities in more than 120 countries. The seven other companies UPS has purchased are located near border points with Canada or Mexico. UPS did not disclose terms of the all-cash deals.

The companies comprising the new unit are:

_Fulfillment Systems International of Buffalo, N.Y.

_Trans-Border Customs Service of Champlain, N.Y.

_H.A. and J.L. Wood Inc. of Pembina, N.D.

_W.Y. Moberly Inc. of Sweetgrass, Mont.

_Border Brokerage Co. of Blaine, Wash.

_William F. Joffroy Inc. of Nogales, Ariz.

_Miles Group Inc. of El Paso, Texas