Deutsche Post tightens grip on DHL underlinigng ambition in global freight market

BONN, Germany (AP) _ Deutsche Post, Germany’s former postal monopoly, said Friday it will raise its stake in cargo airline DHL International Ltd. to 75.6 percent, underlining its ambition in the international freight market. Europe’s largest postal company said it has agreed to buy the 25 percent stake in DHL International held by German airline Lufthansa for 610 million euros (dlrs 595 million). It already owns 50.6 percent and said it plans to take over DHL International entirely in the future. Bonn-based Deutsche Post bought a majority in the Brussels-based DHL International 18 months ago as part of a drive to expand into the express mail and parcel business in Germany and beyond, as deregulation erodes its domestic dominance. It is tightening its grip just as DHL International recovers from the collision of one of its cargo jets with a Russian airliner over southern Germany on Monday that killed both DHL pilots and all 69 people aboard the other plane. DHL International is the biggest air express service outside the United States. It also owns a 25 percent stake in its U.S. affiliate DHL Airways, which is based in Redwood, California and handles all U.S. deliveries. Still, FedEx Corp., of Memphis, Tennessee, and United Parcel Service Inc., of Atlanta, dominate the U.S. market. The purchase of Lufthansa’s shares still has to be finalized between the companies and approved by Germany’s antitrust authorities, Deutsche Post said. Deutsche Post also has been aiming to acquire a total of 22 percent in DHL International from investment funds. Japan Airlines holds the remaining 2 percent. The German government, which still owns 70 percent of Deutsche Post, plans to end its domestic letter-delivery monopoly in 2007.