TPG tries to woo Brussels with TNT sale
TPG Post Group, the Dutch mail carrier, has offered to sell its TNT International mail business in the Netherlands, in an attempt to obtain European regulatory approval for its joint venture with the UK’s Post Office and Singapore Post.
The joint venture was set up a year ago to deliver business mail around the world, but has run into problems with the European Commission, which is concerned the deal will reduce competition in the Dutch market.
The Commission, which opened a detailed four-month investigation into the venture last November, had also been worried it would have an impact on the UK market. But the companies have managed to convince the European Union that it will not lead to competition problems in the UK.
TPG has told the Commission that the divestment of its outgoing international mail business would lead to a viable competitor for the joint venture.
Outgoing cross-border mail, which is already open to competition in the EU, is proving a lucrative market, especially in the Netherlands where big banks electronically send customer statements for distribution by post all over the EU as a way of cutting costs.
Out of revenues of E450m ($415m) arising from the venture, 63 per cent or E285m are destined for the Dutch group. TPG does not break down the share of that total from outgoing cross-border mail, but analysts said it was unlikely to offer a unit that generated a significant portion of potential sales.
The venture, known as Delta, was heralded as the first time postal services from different countries had joined forces for letter delivery in direct competition with national operators.
TPG, the Post Office and Singapore Post each planned to contribute their international mail businesses to a company based in Brussels, with the Dutch group holding a 51 per cent stake.
But the Commission is pressing EU countries to liberalise their letters markets. It was concerned that if the two EU operators pooled their international company mail businesses, they would be unwilling to compete against each other in their home markets.
TPG has given the Commission a list of customers served by the outgoing business mail operation and said the venture would not seek any business for outgoing mail with those customers.
