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FedEx Corporation Press Releases`

FedEx Trade Networks to Offer Full Range of Global Trade Services; Acquisition of Tower Group International Marks First Step

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Business Editors

MEMPHIS, Tenn.--(BUSINESS WIRE)--Feb. 17, 2000--FedEx Corp. is creating an independent subsidiary to serve the ever-growing number of customers doing business globally.

The new company, FedEx Trade Networks Inc., will pursue business and service strategy designed to assist customers with their plans for international trade and transportation. Once fully in place, FedEx Trade Networks will offer unmatched trade services that will greatly help customers of all sizes solve the intricacies of shipping goods globally by providing:

--Full-service customs brokerage, which involves entry filing and release services, assessing and advancing customs duties and fees, and filing declarations for items shipped via express air and truck networks.

--Trade consulting and information technology, including fully integrated regulatory compliance for imports and exports, document preparation and archiving.

--E-clearance solutions, which will make it possible to quickly clear more shipments through customs by using advanced e-commerce programs.

--Transportation and logistics services.

FedEx Trade Networks will strengthen the leadership position FedEx has long held in global express shipping and technological innovation.

G. Edmond Clark, 45, formerly senior vice president, Operations Support & Engineering for FedEx Express, will serve as chief executive officer and president of FedEx Trade Networks. Kenneth R. Masterson,55, executive vice president, general counsel and secretary for FedEx Corp., will serve as chairman of the new company and retain his duties at the holding company.

"FedEx has long been a pioneer in global express transportation and facilitating world trade; the creation of FedEx Trade Networks Lisa logical addition to our service offerings," Clark said. "FedEx Trade Networks will assist the global business community in planning and navigating the web of logistical, regulatory and cost challenges in the international trade arena."

As the foundation for building FedEx Trade Networks, FedEx Corp. today announced plans to acquire Tower Group International and its Canadian subsidiary from The McGraw-Hill Companies. Tower Group International is a leader in the business of international logistics and trade information technology. The acquisition is subject to regulatory review in the U.S. and Canada, and it is anticipated the transaction will close by the end of February.

Tower Group International will become a subsidiary of the new FedEx Trade Networks. Tower Group International and other FedEx Trade Networks units will provide services to customers of its sister FedEx companies as well as other international shippers.

Gerald P. Leary, 46, formerly vice president, Global Trade Services for FedEx Express, will serve as president and chief operating officer of Tower.

International shipping is an increasingly vibrant market segment. With unprecedented global air route authorities to 210 countries,FedEx Express is the industry leader in reliably serving this growing market. FedEx connects 90 percent of the world's economic activity with delivery in one to two business days. More U.S. Customs import entry transactions are processed through FedEx Express than any other express operator.

"The addition of Tower Group International to the FedEx family creates a strong combination that will broaden our e-clearance and supply chain solutions portfolio," Leary said. "FedEx Express has contracted with Tower Group International on customs issues since1994. We welcome this progressive company as a full-fledged member of the FedEx family."

Tower Group International has 1,600 employees and 63 offices throughout North America. The company also specializes in warehousing and national distribution, duty drawback, trade consulting, cargo insurance, and public and private seminars. Tower Group International reported revenues of $116.3 million for the year ended December 31, 1999.

With annual revenues exceeding $17 billion, FedEx Corp. is the premier global provider of transportation logistics, e-commerce and supply change management services. The company offers integrated business solutions through a network of subsidiaries operating independently, including: FedEx Express, the world's largest express transportation company; FedEx Ground, North America's second largest provider of small package ground delivery service; FedEx Custom Critical, the world's largest provider of expedited time-critical shipments; FedEx Global Logistics, an integrated logistics, technology and transportation-solution company; and Viking Freight, less-than-truckload carrier operating principally in the western United States. More than a million customers are connected electronically through the FedEx information network and approximately two-thirds of its U.S. domestic transactions are now handled on-line.

--30--JMP/na* CONTACT: FedEx Media Relations Cornell Christion or Jesse W. Bunn, 901/395-5007 KEYWORD: TENNESSEE INDUSTRY KEYWORD: TRANSPORTATION AIRLINES E-COMMERCE MERGERS/ACQ

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