Omniva to acquire 100% of AS Express Post
Ekspress Grupp and Postimees Grupp, the largest media organisations in Estonia, are selling AS Express Post, which is providing the newspaper delivery service in bigger cities, to the state-owned postal service provider Omniva.
The purpose of the transaction is to find a more sustainable business model for the newspaper delivery service.
Based on the contract concluded between AS Ekspress Grupp and AS Postimees Grupp and AS Eesti Post, which is operating under the Omniva trademark, Omniva will acquire 100% of AS Express Post. Before entry into force of the transaction, it must be approved by the Estonian Competition Authority, which may take up to five months to form its opinion. Until the Competition Authority has made its decision, both companies will carry on with their daily operations and nothing will change for the employees, customers, or subscribers during this period. It is planned to merge the companies once the Competition Authority has granted permission for the merger.
According to Mart Mägi, Chairman of the Management Board of Omniva, the transaction is necessary to maintain the level of quality of the periodical delivery service and to increase the sustainability of the service. ‘In connection with the changes in the media market in recent years, we can see that merging the companies is the best solution for ensuring a high-quality service for the customers. The merger of the home delivery services of Omniva and Express Post will allow to save significantly and will thereby increase the sustainability of the service. After receiving a positive decision from the Competition Authority, we intend to merge Express Post and Omniva, taking advantage of the strengths of both organisations. I see the employees of Express Post playing an important role in ensuring a high quality of the delivery service in the future. Omniva is very interested in integrating the current employees of Express Post with Omniva. We would like to make the merger of the companies as smooth as possible for all employees,’ said Mägi.
According to Mari-Liis Rüütsalu, Chairwoman of the Management Board of AS Ekspress Grupp, it is not possible to stick with parallel delivery networks when the volumes are decreasing. ‘Express Post has managed to take good care of our readers and provide a high-quality early-morning periodical delivery service in spite of the constant changes in the media landscape and the gradual shrinking of the circulations of paper editions. Taking a look further into the future, we can see that the operation of several parallel delivery networks will become increasingly difficult in Estonia year after year, even though both delivery organisations are constantly improving their efficiency and the rural regions are subsidised by the state. Express Post has been earning losses in recent years and the current owners have been financially supporting the company to ensure a high-quality delivery service. As a publisher, we are interested in offering the readers affordable newspaper subscriptions for as long as possible and, in a country the size of Estonia, the merger of postal service providers is the only way for achieving this. The merger of Express Post and Omniva will create a bigger and stronger postal organisation which is beneficial for all parties, especially the regular subscribers of newspapers and magazines,’ Rüütsalu explained.
Toomas Tiivel, Chairman of the Management Board of AS Postimees Grupp, said that the paper media delivery service in Estonia must be maintained. ‘The aim of the media houses is to ensure the sustainability of the paper media delivery service in the bigger cities as well as outside of them. The circulation of the paper editions is decreasing by 5–6% every year, but the readership of print media remains extensive and it plays an important part in keeping the society informed. A high-quality delivery service must be ensured for everyone interested in it after the merger of Express Post and Omniva as well,’ noted Tiivel.
Katri Laanela, Managing Director of AS Express Post, believes that the postal service providers can learn from one another after the merger to create a more sustainable delivery service. ‘Express Post, which will be twenty-five years old this year, has been constantly developing and has gone through a lot of changes. In the last few years, we have been paying a lot of attention to improving the quality and work processes of the delivery service and to increasing the efficiency of the company. After entry into force of the transaction, we will be able to apply our knowledge, skills, and experience in cooperation with Omniva and take the quality of the delivery service and support services in Estonia to an even better level,’ said Laanela.
AS Express Post, which was established in 1997, is delivering press publications, advertising materials, and business letters in and around the largest cities in Estonia. Express Post also provides a call centre service and subscriber database management service. The company employs almost 490 people, including 450 mail carriers. In 2021, the turnover of Express Post was 5.2 million euros, with the loss amounting to 566,300 euros. AS Ekspress Grupp and AS Postimees Grupp held equal shares in the company.