New Zealand Post and Salmat propose joint venture in unaddressed mail distribution
New Zealand Post Limited and Salmat Limited announced today that they are working on a proposal for a joint venture business in unaddressed mail distribution within New Zealand.
Subject to clearance by the Commerce Commission and other conditions, New Zealand Post and Salmat propose merging the businesses of their respective unaddressed mail subsidiaries, Letterbox Channel Limited and Deltarg Distribution Systems Limited.
New Zealand Post and Salmat will today file an application with the Commerce Commission for clearance to become equal 50 pct shareholders in a new joint venture company that would acquire the businesses of Letterbox Channel and Deltarg.
The proposed joint venture would combine the current strengths of Letterbox Channel and Deltarg while realising a number of operating efficiencies and network synergies. The proposed company would continue to provide an excellent, economic service to current customers of Letterbox Channel and Deltarg, while being better positioned to compete strongly for a share of overall media advertising spend in New Zealand.
New Zealand Post’s Group Manager, Enterprises, Stephen Henry, and Salmat’s Divisional Director, Targeted Media, Peter Boyle said the proposed joint venture company would have estimated revenue of between NZ$ 40-50 million in its first full year of operation.
They said New Zealand Post and Salmat proposed contributing the assets of Letterbox Channel and Deltarg respectively to the proposed joint venture company in acquisition of their 50 pct shareholdings. Independent assessment and discussion between the parties had determined that the two businesses were of comparable value. The shareholders would share in the joint venture establishment costs and initial working capital requirements.
Mr Henry and Mr Boyle said Letterbox Channel and Deltarg would continue operating separately and in competition pending the Commission’s decision on the clearance application and final decisions to be made by New Zealand Post and Salmat.
