Correios (Brazil's Postal Service) and Azul announce the execution of a non-binding Memorandum of Understanding

São Paulo, December 20, 2017 – Azul and Correios (Brazil’s Postal Service) sign today a memorandum of understanding for the creation of a private integrated logistics solutions company with a new business model, to contribute significantly to Brazil’s growth.

The new company will have a 50.01% ownership stake of Azul and 49.99% of Correios, and will offer integrated logistics services for cargo transportation, willing to become the best logistics platform for e-commerce in the country.

With the existing demand already served by Azul and Correios, the new company will handle roughly 100 thousand tons of cargo per year. Both companies will have cost savings, operating efficiency and revenue gains, improving the service offer to the consumer.

"Azul is the only company with a broad aviation network, connecting the country with more than 100 destinations served. Correios are present in 5,570 Brazilian cities, with the biggest distribution capillarity from its network. Having a company exploring this synergy, more Brazilians will have access to integrated services, allowing them to be even more active in the development of our country", says Gilberto Kassab, Minister of Science, Technology and Communication.

"We saw a unique opportunity to make Brazil even more efficient in logistics service, with clearer benefits to consumers. The beginning of this company will benefit Brazilians with Correios’ current logistics costs reduction and dividends distribution, further improving the efficiency of our operation", says Guilherme Campos, CEO of Correios.

"It is a great opportunity to expand our cargo transportation and to increase operating efficiency. We are the only company providing this level of service, as we are serving most of the cities in the country. In addition, we have a strong presence in Viracopos airport, which is already the cargo hub in Brazil. Further, we have one of the highest on- time performances in the industry, which is essential for this service", affirms John Rodgerson, CEO of Azul.

The memorandum of understanding will be submitted to the Brazilian authorities and appropriate government bodies for approval. Only after their consent, the new company will be established and its activities are expected to begin in the first half of 2018.