Sweden Post announces agreement to divest parcel delivery and logistics operations in Baltic rim, Poland and Russia
Sweden Post today announced that it has entered into an agreement to sell its Baltic-, Poland- and Russia-based parcel delivery and logistics business operations to Geopost, a wholly owned subsidiary of La Poste. Posten AB partly owns the parcel delivery and logistics companies in Poland and Russia and wholly owns the Baltic businesses. The transaction, a consequence of the new board-sanctioned strategy, will positively affect Sweden Post's net income and cash flows.
Background
In the mid-1990's Sweden Post adopted a strategy incorporating international expansion and seizing business opportunities in and around the Baltic rim. In 1996 Sweden Post's board sanctioned the establishment of parcel-delivery and logistics operations in the Baltic countries as well as Poland and Russia. A wholly owned subsidiary, Baltic Logistic System International AB (BLS-I), was subsequently formed for this purpose. Stakes in Russia-based Armadillo and Armadillo Business Parcel were also acquired.
Under the new strategy announced by Sweden Post's board in December 2003, Sweden and the rest of the Nordic region are Sweden Post's principal markets. Outside this geographic footprint Sweden Post will manage incoming and outgoing parcel flows primarily through strategic alliances rather than subsidiaries. The divestiture of the BLS-I operations is therefore in line with the afore-cited strategy.
Business operations
The transaction includes the following BLS-I business operations:
BLS-Eesti (Estonia) – DPD franchisee
BLS-Latvija (Latvia) – DPD franchisee
BLS-Vilnius (Lithuania) – DPD franchisee
Masterlink Express and its subsidiary Air Cargo Poland (Poland) – DPD franchisee
Armadillo and Armadillo Business Parcel (Russia)
The companies reported 2003 sales of approx. SEK 300m and employ 1,000.
The transaction
Sweden Post entered into a DPD parcel network agreement with DPD Gmbh/GeoPost in 2001. The companies to be divested have been and will continue to be DPD franchisees. Customers therefore will experience no disruption in service. The transaction will positively affect Sweden Post's cash flows and net income.
President and CEO Erik Olsson commented: "I'm delighted that we were able to negotiate a transaction combining Sweden Post's dedication to its core business with the best possible solution for our customers. People choosing DPD will continue to receive premier services in a highly interesting and expansive market."
Posten connects people and organizations around the world by delivering mail promptly, reliably and cost-effectively. We drive value creation by combining conventional postal services with convenient electronic solutions, and integrating these services into customers' businesses. Simply put, we are experts at everything between "From and To." With over 3,000 retail service outlets, we provide daily service to 4.3 million homes and 800,000 businesses in Sweden. Every day we handle close to 20 million pieces of mail. With sales of over SEK24 billion and roughly 38,000 employees, the group is one of the largest in Sweden. The group's parent, Posten AB (publ), is wholly owned by the Swedish state. For more information, please visit our Web site at www.posten.se
This press release was brought to you by Posten AB.
GeoPost press release
28th May 2004
GeoPost expands in Poland, Baltic States and Russia
GeoPost and Posten Sverige AB announced today: GeoPost , the rapidly expanding parcel and express company, wholly owned by the French La Poste Groupe, has signed an agreement with the Swedish Post for the acquisition of Baltic Logistics System International AB (BLS-I), with operations in Poland, the Baltic states and Russia.
Paul-Marie Chavanne, Chairman and CEO of GeoPost, says: ”This acquisition represents one more step towards the constitution of the GeoPost pan-European network. This comes precisely at the right moment, with the entry of Poland, Lithuania, Latvia and Estonia in the European Union. Moreover, we want to take advantage of the opportunities offered by the huge Russian market.”
The operations concerned are: Masterlink Express (Poland),BLS-Eesti (Estonia), BLS-Latvia (Latvia), BLS-Vinius (Lithuania), Masterlink Express and its subsidiary AirCargo Poland (Poland) as well as Armadillo and Armadillo Business Parcel (Russia), BLS Lithuania, BLS Latvia and BLS Estonia. The turnover of these companies in 2003 was approximatively in excess of 350 million €. More than 1,000 well trained employees work for these companies.
With this transaction, GeoPost acquires full ownership of the companies in Poland and in the Baltic states. tes and in PolandThe purchase of Amardillo is done, while purchasing 100 percent of the two Russian companies through a joint venture with foremost Turkish operator Yurtiçi Kargo,. which is already GeoPost’s partner for Turkey and the Balkans.
Claude Béglé, Executive Vvice-Ppresident of GeoPost comments: “This deal is good news for the BLS-I customers as we intend to develop the services offered by the acquired companies. It is also good news for our customers in all other European countries because as we shall now be able tocan serve them better in those new destinations”.
Since 2001, the Swedish Post has a cooperation with GeoPost within the framework of the DPD network. Masterlink in Poland is already delivering both Chronopost and DPD services. The Baltic countries will remain DPD franchisees and develop new services. Amardillo will become DPD franchisee for Russia. For the Swedish customers there will be no change. Quotation Eric Olsson:……The DPD franchising contract in Scandinaviawill continue.
