Deutsche Post eyes Blue Dart (India) – open offer likely

Even after the multi-billion dollar acquisitions of DHL Worldwide and Dansas, the German postal group Deutsche Post World Net seems to be hungry for more. It has been gathered that the company now intends to make an entry into the Indian domestic express business by making an open offer for Blue Dart Express. While the stake percentage to be bid for could not be ascertained, sources have it that the open offer may be around Rs 120. Blue Dart shares currently trade at Rs 78-83 on The Stock Exchange, Mumbai (BSE), with a 52-week low and high of Rs 52 and Rs 89 respectively. The company, sources said, has already appointed a merchant banker to work out the modalities of the open offer. When contacted by FE, DHL Indias country manager Chris Callen said that he was not in a position to comment on shareholder issues. Mr Callen claimed that he had forwarded the queries to his regional office in Singapore, but there was no reply even after three weeks. Tushar Jani, Clyde Cooper and Khushroo Dubash hold 51 per cent in Blue Dart. Of this, Mr Cooper and Mr Dubash together hold 33.24 per cent stake. While DHL has been clearly focussed on the international express business, its recent acquisition by Deutsche Post has made it look at synergies between domestic and international business in certain countries. "Deutsche Post has the expertise of running domestic express business and its mega acquisitions have provided the international infrastructure. It is only natural for the company to look for platforms where both can be integrated," said an analyst. For instance, in the US, DHL has entered into a merger agreement with the express parcel delivery provider Airborne Inc. The service portfolios of Airborne and DHL are complementary. This deal will combine the international capability of DHL – the market leader outside the US and operating the worlds most extensive international parcel delivery networks – with Airbornes domestic strength in the US market. The move, though, has got temporarily stalled, as rivals UPS and FedEx Corp have filed petitions asking the US Department of Transportation to review the ownership of DHL. However, Deutsche Post has not limited its activities to the US alone. Earlier this year, the German company took control over UKs Securicor Omega, by acquiring an additional 50 in a deal worth Euro167 million, to take advantage of the countrys rapidly deregulating parcels sector. Deutsche Post bought its initial 50 per cent stake in Securicor Omega four years ago. Since January this year, Securicor Omega has been trying out bulk and consolidated mail deliveries after winning a licence last year to provide private sector competition to Royal Mail. The German major is also reportedly in talks with Singapore-based SingTel to acquire its postal services business. DHL, which has operations in more than 220 countries, had recently identified India as one of its three key strategic markets in Asia, the other two being China and Japan. Out of the 16 countries in South-east Asia, India is the largest market for DHL in terms of revenues. DHL is the market leader in the international air express business with 60 per cent of the market share. Little wonder then that Deutsche Post, the parent company of DHL, sees a terrific business opportunity in forming and growing businesses within this country and has earmarked millions of euros for investments in India. "Considering the developments globally, Deutsche Posts entry into the domestic business by acquiring a stake in Blue Dart seems to be quite a logical and probable move," says an industry observer. In India, DHL has a marketing tie-up with Blue Dart Express, whereby the Indian company sells the DHL brand to its customers who need international logistics solutions. Blue Dart is also DHLs biggest customer.

Copyright 2003 The Indian Express Online Media Ltd.. Source: Financial Times Information Limited.