€2.5bn target for Deutsche Post sale
Deutsche Post, Europe’s biggest postal service, has mandated Deutsche Bank and Morgan Stanley to manage the initial public offering (IPO) of its Deutsche Postbank unit in what would be Germany’s biggest flotation for two years.
The sale could raise at least E2.5bn ($3bn, GBP1.7bn), according to Deutsche Post, and would be the biggest since Deutsche Borse, Germany’s stock exchange, and Fraport, operator of the Frankfurt airport, sold shares to the public in 2001. Deutsche Post announced last month that it planned to sell up to 50% minus one share of the retail bank in the second half of next year to reduce debt and fund its plans for European expansion. The company has spent $6bn on acquisitions in recent years to reduce its reliance on the German market.
Postbank, which conducts its business through 13,000 post offices throughout Germany, has an estimated 10m clients in its home market, more than its publicly traded rivals Deutsche Bank and HVB Group. Last month the bank announced plans to raise its retail-banking market share in Germany to 10% in the next three years from between 7% and 8% at the moment. Unlike the UK market, which in recent months has seen a remarkable pick-up in flotations, the German market has seen no IPO activity this year. But next year should see some pick-up. The German government is not alone among other euro- zone governments under pressure to reduce stakes in state-controlled companies to raise money to reduce burgeoning budget deficits. Earlier this year the government appointed Morgan Stanley to prepare for a possible share sale of Deutsche Bahn, the state railway, as early as 2005. The French government has already appointed a number of investment banks to prepare flotations, notably of Electricite de France and Gaz de France. The government is expected to be severely criticised by the European Commission later this week for its deficit. Market watchers expect the flotations, among the biggest-ever in Europe, to take place over the coming two years. In Belgium the government is already selling its shareholding in Belgacom, the former telecoms monopoly.
