Amazon Spent $131M to Take a Minority Stake in This Company

E-commerce giant Amazon has spent $131 million to take a minority stake in air cargo contractor Air Transport Services Group (ATSG).

Revealed in an SEC filing this week by Air Transport Services Group, Amazon had exercised warrants in the company that will give it a minority stake.

Amazon owns warrants in both of its primary air freight partners, ATSG and rival Atlas Air.

Amazon exercised warrants in ATSG that will allow it to acquire about 13.5 million shares in the cargo airline at an exercise price of $9.73 per share, or more than $131.9 million, ATSG said in the SEC filing.

As part of a separate agreement, Amazon also purchased approximately 865,000 shares of ATSG, with no cash exchanging hands, the filing states.

Shares in ATSG closed up 5.5% on Monday while Amazon shares fell 1.6%.

Amazon has owned warrants in ATSG since 2016. It was granted warrants as part of an agreement to lease 20 Boeing 767s from ATSG. The company also owns warrants to buy a minority stake in rival carrier Atlas Air Worldwide Holdings.

Amazon is growing its Amazon Air unit which is dedicated to air service and has plans to open a $1.5 billion air hub in Kentucky later in the year.

Amazon is pushing to provide one- and two-day delivery. The company relies on ATSG and Atlas Air to fly a large portion of its packages.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.