German cabinet approves Deutsche Post sale
The German cabinet on Wednesday approved a finance ministry proposal to remove the remaining legislative obstacle barring the sale of a majority stake in Deutsche Post, the country’s post and logistics group.
Berlin has not given any details about the size or timing of further share disposals. The proposal will now go before parliament.
Last November, the government floated about 30 per cent of Deutsche Post’s equity in an initial public offering. However, analysts expect Berlin to take the opportunity to sell further tranches as soon as possible.
Hans Eichel, Germany’s finance minister, has set tough targets to balance the budget by 2006 and is known to be interested in additional asset disposals to raise income in the light of slowing economic growth.
Under existing legislation, Berlin had been banned from taking its Deutsche Post holding below just over 50 per cent, because of complex rules linked to guaranteeing a broad nationwide mail delivery service.
The guarantee has now passed from the federal government to Deutsche Post itself. However, abolition of the requirement that the state hold a majority stake still has to be formally approved by parliament.
The legislative changes are expected to be completed by the end of the year, allowing the government to sell further Deutsche Post equity from 2002.
The company, which has expanded aggressively through acquisitions in logistics and parcels, has been trying to improve its financial performance.
Last week, Deutsche Post, Europe’s biggest postal services group, said it would cut 3,000 jobs in its mail delivery service by early next year.
In spite of its acquisitions, delivering mail still accounts for nearly three-quarters of Deutsche Post’s profits and analysts have seen scope for reducing costs.
The difficulties still facing Deutsche Post as a hybrid listed company controlled by the state were evident in angry trade union reaction to the planned job losses.
Separately, the European Commission on Wednesday imposed a “symbolic” fine of E1,000 for infringing European Union competition rules by disrupting international mail bound for Germany.
Financial Times
