TNT reaches agreement to sell its logistics division to Apollo Management

TNT has signed a Sale and Purchase Agreement to sell its logistics division to affiliates of Apollo Management, L.P., a leading private equity firm with offices in New York, London and Los Angeles. The intended sale is part of TNT's Focus strategy in which the Company announced on December 6th last year that it would focus on its core competency of managing delivery networks. The total transaction value is EUR 1,480.0 million on a cash and debt free basis, of which EUR 15.0 million will be received in the form of a 5.0% equity stake in the new company. TNT intends to return most of the net proceeds, which are estimated at between EUR 1.2 billion and EUR 1.3 billion, to its shareholders by way of a share repurchase programme with a value of up to EUR 1.0 billion.

The intended sale is subject to the approval of TNT's shareholders at an Extraordinary General Meeting of Shareholders (EGM). Furthermore the sale is conditional upon the customary approval of EU and other regulatory bodies. The positive advice of the Company's central works council has been obtained. Completion of the transaction is expected before the year end.

Peter Bakker, CEO of TNT comments: "This transaction is an important milestone in our Focus strategy and will enable us to fully focus on growing our core network business. I am pleased that we have been able to come to an agreement with Apollo. I am proud of the employees and management of Logistics for their dedication and commitment to TNT. They have been able to keep the business developing and solid over the last nine months and we are very confident of their future success."

After completion of the transaction, Dave Kulik will resign from the TNT Board of Management to become CEO of the new company. Kulik comments: "This transaction gives us the opportunity to further evolve into a leading global service provider in logistics, meeting the specific needs of our customers. Leveraging on our expertise, infrastructure, customer base and Apollo's commitment we are poised for a competitive and profitable future."

Founded in 1990, Apollo is a recognised leader in private equity, debt and capital markets investing. Apollo's current and past investments in the distribution, transportation and logistics industries include Pacer International, Quality Distribution, Metals USA, United Agri-Products, and Affinion, AMC Entertainment, Cablecom, General Nutrition Centers, Goodman Global, Hexion Specialty Chemicals (which includes the former coatings and inks resins division of Akzo Nobel and Resolution Performance Products formerly owned by Royal Dutch Shell), Nalco and Unity Media.

For TNT, the announcement brings to an end months of negotiations for the sale of the Logistics division. Attention may now switch to the Group's Freight Management operations, the future of which is under review. For both employees and customers of Logistics, however, uncertainty may inevitably continue as plans for the future of the Logistics division unfold. Apollo will be hoping the division can build upon a robust H1, 2006 performance, following much publicised difficulties in France in 2005.

Ranking TNT Logistics in the upper tier of European logistics providers, Who's Who in European Logistics 2006 benchmarks the division against 29 major competitors across Europe. The research provides comprehensive analysis of both financial performance (logistics revenues, contract logistics revenues, margins, growth, country revenues and sector revenues) and operational indicators, such as employee numbers, warehouse space and sites. See below for further details