Year: 2005

Deutsche Post will today unveil a Pounds 3.7bn agreed takeover of Exel, the UK logistics company, in an attempt to wean it off its dependence on mail delivery in Germany before it loses its monopoly in two years’ time. Both boards approved the deal at the weekend to create the world’s biggest logistics group with a workforce of about 500,000 and combined revenues last year of Euros 52bn (Pounds 35bn). Deutsche Post, Europe’s biggest postal service, is offering a mix of cash and shares that values Exel at about Pounds 12.40 a share. The shares component will be about 28 per cent. The German group is also proposing cost synergies of Euros 200m a year. UPS, the most likely rival suitor, is believed to be watching the situation closely but it is not known if the US group will counter-bid. Analysts have suggested UPS’s rival, Federal Express, might also be interested. The takeover will be seen as a success for John Allan, Exel’s chief executive, who will run the enhanced logistics operations from Bracknell, Berkshire. He will also gain a seat on Deutsche Post’s management board.

Deutsche Post AG has reached an agreement with Exel plc, London, concerning the planned acquisition of Exel by the Company. The price for each Exel share is 900 Pence (13.30 Euro) and 0.25427 shares of the Company. As a result, based on the closing price of the share of the Company on September 16, 2005, the aggregate consideration per Exel share amounts to 1,244 Pence (18.39 Euro) and the total value of the transaction is approximately 3.7 billion Pounds Sterling (approximately 5.5 billion Euro) (taking into account proceeds from the exercise of Exel stock options). Approximately 72% of the acquisition price will be paid in cash, the remainder by issuing new shares from the authorized capital of the Company. The Company’s share capital will thus increase by approximately 7%. Upon completion of the transaction, Deutsche Post World Net intends to appoint John Allan as head of the enlarged business unit LOGISTICS, comprising the combination of Deutsche Post World Net’s and Exel’s existing logistics activities. Deutsche Post World Net intends that John Allan will lead the integration process. The headquarter of the combined business is intended to be located in Bracknell, United Kingdom.

Deutsche Post is set to announce an agreed takeover of Exel on Monday that values the UK logistics company at about GBP3.6bn (USD6.5bn) and could create the world’s biggest logistics group. The German group was holding a supervisory board meeting on Friday to approve the deal, according to people close to the situation. Exel board members are due to convene on Sunday to agree to the terms of the deal. Deutsche Post is offering a mix of cash and shares that values Exel at around GBP12.40 a share – considered to be at the higher end of expectations. The shares component will be 25-30 per cent. The German group is also proposing cost synergies of EUR200m (USD244m) a year. John Allan, chief executive of Exel, will be made head of the enhanced logistics division which will be run out of Bracknell in the UK. He has also been offered a place on the management board.