United Parcel Service Inc. and FedEx Corp. have managed to disrupt plans by rival Deutsche Post AG, which owns DHL Worldwide Express, to expand in the U.S. by using a must-pass war-funding bill. Last week, the Senate voted to include an amendment intended to force regulators to be stricter in enforcing U.S.-ownership regulations for air-cargo carriers against the German company.
Read MoreIndustry analysts say DHL Worldwide’s proposed acquisition of Airborne Inc. will receive intense scrutiny from the U.S. Department of Transportation. Greg Burns of J.P. Morgan Chase believes the deal will be approved because of its impact on competition despite fierce opposition from FedEx Corp. and United Parcel Service. Other analysts were more skeptical. Scott Flower of Salomon Smith Barney gave the deal a 60 percent chance of approval, but noted that it will also be subject to political pressures.
Read MoreDHL Worldwide plans to go ahead with its purchase of Airborne Inc. even if the U.S. Department of Transportation rejects the deal. If Airborne and DHL, which is owned by Deutsche Post World Net of Germany, cannot obtain DOT approval, DHL would acquire all of Airborne and then transfer Airborne’s freighter fleet to a third-party operator, according to James Valentine, an analyst with Morgan Stanley.
Read MoreDeutsche Post World Net AG subsidiary DHL said it expects China to become its largest market in the Asia Pacific region within two to three years. Chief operating officer for Asia Pacific John Mullen said the company’s business volume in China is currently growing at a rate of 45-50 pct year-on-year.
Mullen said DHL plans to add some 10-11 collection and distribution points in China this year and invest further in infrastructure and technologies in the region.
Deutsche Post World Wide AG must negotiate a tricky political and regulatory environment if it hopes to secure approval for its proposed $1.05 billion acquisition of Airborne Inc. The deal raises a host of political issues, including state-sponsored monopolies, national security and free trade. The German government owns a majority stake in Deutsche Post, which has led to charges that the postal giant is using monopoly profits from German mail delivery to subsidize U.S. operations. Also in question: whether Deutsche Post and its U.S. unit, DHL Worldwide Express, can structure the deal to avoid a U.S. ban on foreigners controlling domestic airlines, including cargo carriers.
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