TNT Post Group, British Post Office act to save joint venture

TNT Post Group, (TPG) the Amsterdam-based global mail, express and logistics group, and Britain’s Post Office are preparing last-minute concessions to obtain European regulatory approval for their three-way international mail venture with Singapore Post.

The two companies have until Tuesday to alleviate concerns of European Union antitrust officials that the planned venture, called Delta, will have a stranglehold over business mail between Britain and the Netherlands.

When the three companies unveiled the venture last March, they said it would be “the world’s largest business mailing partnership,” with annual revenue of $410 million.

European regulators recommended blocking the deal unless the companies offer remedies to ensure it will not eliminate competition in the British and Dutch markets. The two companies would account for over 85% of outbound cross-border mail in the Netherlands and about 70% in Britain.

Competition officials say that TPG and the Post Office would be able to boost volume and negotiate improved terms with airlines and customers by combining their global mail businesses. That would raise barriers to entry to newcomers and undermine consolidators who collect and group business mail.

Some fear that consolidators, which compete with the Post Office and offer bulk discounts to customers, could disappear from Britain’s cross-border mail market if the deal is approved.

Under the original plan, TPG would take a controlling 51% stake in Delta, with the Post Office and Singapost Post each taking 24.5%.

Delta marks the first time postal companies from different countries are teaming up for cross-border mail in direct competition with national postal authorities. The companies plan to pursue a U.S. partner to bolster coverage of the global corporate mail market, which is estimated to be worth $7 billion a year.

Bruce Barnard can be reached at [email protected].