K+N protests as Deutsche Post swoops for Exel

SWISS logistics company K’hne + Nagel has criticised the likely takeover of UK-based supply chain giant Exel by Germany’s Deutsche Post.

‘This is a serious threat to free market competition,’ K+N’s chairman Klaus-Michael K’hne said, according to Swiss daily Tages- Anzeiger.

Mr K’hne has repeatedly attacked the German market leader for its monopoly in standard letter delivery, which was providing easy cash funds for acquisitions in the logistics industry.

‘Apart from the fact that the logistics industry in its medium-sized structure will be faced with unfair competition, there is now a serious threat to free competition through the utilisation of the mail monopoly to finance the merger of Deutsche Post and Exel,’ he said earlier this month.

A spokesman for Deutsche Post strongly dismissed the attacks. In response to suggestions that there was a connection between profits from the mail business and investments in logistics companies such as Danzas, DHL or Airborne, he said: ‘This is definitely wrong. Mr K’hne is telling untruths.’

Authorities, both in Germany and Brussels, had already concluded that Deutsche Post’s investments in the logistics division had not been fed by revenues from the mail business, he added. ‘No monopoly money has been poured into the expansion of the logistics division,’ the spokesman said.

The merger of Deutsche Post’s logistics unit DHL and Exel would put the new logistics group ahead of K+N in ocean freight and expand DHL’s position as number one in air freight. Moreover, Exel is market leader in contract logistics.

Deutsche Post will lose its mail monopoly in 2007.

A spokesman for the European Commission said it was up to the individual parties to check whether any takeover would fall under the scope of the Merger Regulation, and, if so, to notify Brussels.

So far the Deutsche Post and Exel deal had not been notified.