TPG: showing its muscle in Brussels?

Dutch postal and logistics group TPG [TPG.AS] has is considering selective acquisitions in the European postal market, according to the Dutch newspaper the Het Financieele Dagblad. The move forms part of a wider contest in the European postal market, with the bigger operators competing to secure stakes in postal companies, as Europe’s postal sector opens up to competition.

As well as the media reports that it is looking at a European acquisition, TPG has also reiterated that it will meet its operating margin targets set for 2004. The targets include a margin of around 21.5% at its mail unit, 10% at the Express division and some 4% at the logistics unit. TPG’s chief financial officer, Jan Haars, said that the company would use the surplus cash for investments rather than share buy-backs from the Dutch government.

Investments primarily mean acquisitions, which will be targeted at filling the gaps in the company’s express network, particularly in emerging markets, in the freight-forwarding sector and in European mail consolidation. With these points in mind, TPG is keeping an eye on developments as European governments start considering the privatization of mail monopolies, ahead of the full deregulation of the EU postal market.

Currently, there are two European countries planning to get involved in this process: Belgium and Denmark, and TPG has expressed interested in buying stakes in the postal operators from both countries. In late September, the company said it would bid for the 25% of Post Danmark being sold by the Danish government. The sale was expected for November, but has been pushed back to the year-end or January 2005.

Now, TPG is looking at Belgian La Poste/De Post as the company intends to find a strategic partner. The Belgian state is looking to scale down its share in the operator ahead of liberalization, while La Poste will gain added commercial freedom from the sale of the stake.

TPG’s acquisition policy is built on gaining controlling stakes, which will clearly not happen with either Post Danmark or La Poste/De Post, at least not in the short term. In addition to this, the company can expect competition in the bidding process from rivals such as France’s La Poste and especially Deutsche Post, whose avowed interest in the Danish stake and aggressive M&A activity of recent years must put it in pole position for any further European consolidation deals.