The new unit will include the Fritz Companies, Inc.; seven brokerage and forwarding operations acquired over the past 18 months, plus UPS's existing freight forwarding interests.

This division, with net revenues exceeding $750 million, combines Fritz's worldwide reach with additional, concentrated expertise and capabilities inside the United States. It will be headed by David Abney, a 27-year UPS veteran and former president of SonicAir, which is now part of UPS Logistics Group. The new business unit is not expected to have a material impact on UPS's earnings this year.

UPS agreed in January to acquire the Fritz Companies, a leading freight forwarding, customs brokerage and logistics concern headquartered in San Francisco.

The acquisition of Fritz Companies was structured as a tax-free merger in which Fritz became a separate and wholly owned subsidiary of UPS. Each share of Fritz common stock will be exchanged for 0.200 shares of UPS Class B common stock, for a total issuance of approximately 7.4 million shares of UPS Class B common stock. The transaction will be accounted for as a purchase and is valued at approximately $437 million.

"Long before the purchase of Fritz, UPS developed a strategic plan that called for a dramatic expansion of the company's ability to serve customers shipping not only packages, but also large items and heavy freight across international borders," said Abney. "That plan also called for the company to offer full service customs clearance services to shippers of all goods, not just those shipping small packages."

The acquisitions include:

- H.A. & J.L. Wood, Inc. of Pembina, N.D.

- Border Brokerage Co. of Blaine, Wash.

- Fulfillment Systems International (FSI) of Buffalo, N.Y.

- Trans-Border Customs Service (TCS) of Champlain, N.Y.

- W.Y. Moberly Inc. of Sweetgrass, Mont.

- Miles Group, Inc. of El Paso, Texas

- William F. Joffroy, Inc. of Nogales, Ariz.

The acquisitions were all cash transactions and terms were not disclosed.

"Today, the freight forwarding and customs brokerage industries are highly fragmented, both geographically and in the way services are provided to customers," said Abney

UPS is the world's largest express carrier and largest package delivery company and a leading global provider of specialized transportation and logistics services, serving more than 200 countries and territories.