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In a move to expand in Europe, FedEx Corporation (FDX - Analyst Report) will acquire Polish courier company Opek Sp.z o.o (Opek). The financial terms of the deal were not disclosed.

The acquisition, pending regulatory approvals, is expected to close in summer. The purchase of Opek will increase FedEx Express’, the unit of FedEx, access to nationwide domestic ground network. Post-acquisition, the annual revenue and shipments of FedEx Express is expected to be $70 million and 12.5 million, respectively.

The world's second-largest package delivery company intends to expand its business organically and through small purchases in Europe. This effort will aid FedEx to better compete with United Parcel Service (UPS - Analyst Report), which is spreading smartly in Europe through smaller acquisitions.

Last month, United Parcel has agreed to acquire a Dutch shipping company TNT Express that would boost its footprint in Europe, in particular Britain, France, Germany and the Netherlands, making it the global leader in the logistics industry with annual revenues of more than €45 billion ($60 billion). The transaction, pending various regulatory approvals, is expected to be over in the third quarter of the calendar year and will further expand the company’s presence in Asia and Latin America.

FedEx has a small presence in Europe with 3% of market share compared with United Parcel, which would be enjoying around 16% market share in Europe post-TNT acquisition. FedEx Express has been expanding its European exposure over the last several years. The company purchased ANC Holdings Limited, a UK domestic express transportation company in 2006, and began its wholly owned operation in Hungary after acquiring its service provider Flying Cargo Hungary in 2007.

Additionally, FedEx Express broadened its presence by expanding its European hub at Roissy-Charles de Gaulle Airport, Paris, France in 2009, which makes it the largest FedEx hub outside the United States. Further, the company reallocated its Central and Eastern European hub to Cologne, Germany from Frankfurt in 2010, and opened 26 new stations across France, Germany, Italy, the Netherlands, Northern Ireland and Sweden so far in this year.

We are currently reiterating our long-term Neutral rating on FedEx. The stock retains a Zacks #3 (Hold) Rank for the short term.

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