Duo buy half of Belgian Post
Post Danmark, the Danish post office, and CVC Capital, the UK buy-out group, has agreed to buy almost half of the Belgian post office in a transaction that marks a further step in the consolidation of Europe’s postal sector.
The duo will inject Euros 300m (Dollars 367m) into Belgian Post, valuing the group at Euros 640m. CVC bought 22 per cent of Post Danmark in the summer.
Separately, Deutsche Post, Europe’s largest post office, also underlined its ambitions to expand outside its domestic market by announcing the purchase of a majority stake in MailMerge, a Dutch mailing company.
Deutsche Post, which competed in the Belgian Post auction against a team comprising France’s La Poste and TPG of the Netherlands, last month agreed to buy UK logistics group Exel for Pounds 3.7bn (Dollars 6.7bn).
The Belgian government will keep just over 50 per cent of Belgian Post’s equity. But it portrayed the link-up with outside partners as necessary in preparing the state-controlled company for more competition.
The European Union’s postal sector is due to be fully liberalised in 2009.
Guy Verhofstadt, Belgian prime minister, said: “This is not a purely financial story. This is a wedding between two companies that must lead to a higher quality of services for the clients.”
Johnny Thijs, chief executive of Belgian Post, suggested the partnership could pave the way for a stock market listing.
The group returned to a profit of Euros 40m last year, after two years of losses, and has debt of Euros 16.9m.
Post Danmark is regarded as one of Europe’s more efficient operators. Although synergies will be limited, Post Danmark may improve Belgian Post’s performance by transferring best practice.
Post office businesses are typically dominant market players with high barriers to entry. They are also highly cash-generative. However, mail volumes are falling, employees are heavily unionised and the businesses are obliged by government to provide certain basic services.
The deal comes just days after a Belgian general strike and is certain to add to job concerns among the country’s large public-sector workforce.
But the government insisted that the company’s restructuring would not involve firing employees or steep cuts in the Belgian network of 1,300 postal outlets.
