Deutsche Post AG is planning to lower its postage rate for letters by 0.2 pct from January next year, chief executive Klaus Zumwinkel told Der Spiegel magazine. He also reiterated Deutsche Post’s intention to defend its position in the sector ‘with all means’ following the liberalisation of the German postal market in early 2008.
Read MoreSwiss logistics company Kuehne + Nagel has criticised the likely takeover of UK-based supply chain giant Exel by Germany’s Deutsche Post. ‘This is a serious threat to free market competition,’ K+N’s chairman Klaus-Michael Kuehne said, according to Swiss daily Tages- Anzeiger. Mr Kuehne has repeatedly attacked the German market leader for its monopoly in standard letter delivery, which was providing easy cash funds for acquisitions in the logistics industry. ‘Apart from the fact that the logistics industry in its medium-sized structure will be faced with unfair competition, there is now a serious threat to free competition through the utilisation of the mail monopoly to finance the merger of Deutsche Post and Exel,’ he said earlier this month. A spokesman for Deutsche Post strongly dismissed the attacks. In response to suggestions that there was a connection between profits from the mail business and investments in logistics companies such as Danzas, DHL or Airborne, he said: ‘This is definitely wrong. Mr Kuehne is telling untruths.’
Read MoreThe head of Germany’s Deutsche Post yesterday defended his decision to launch a GBP 3.7bn agreed bid for Britain’s Exel in a deal that will mark a further round of consolidation in the global logistics business. Deutsche Post is offering GBP 2.44 a share, 24% above the Exel closing price before announcement of the initial approach from the German company and 48% higher than the price at which Exel shares were changing hands before the UK company found itself at the centre of bid speculation in July. Klaus Zumwinkel, Deutsche Post’s chief executive, shrugged off some analysts’ concerns that his company had paid a stiff price for the British concern, arguing that the combination of the two businesses would create the world’s biggest logistics company. Rejecting criticism over the price, which is more than twice the pounds 1.6bn the group paid to acquire DHL two years ago, Mr Zumwinkel said the combined logistics business and parcels operation would provide growing earnings to offset stagnant profits from the core mail division. “We can expect attractive growth rates in the future . . . driven by global trade and increased outsourcing.”
Read MoreOne date has been etched on the brains of Deutsche Post executives for years: December 31 2007. It marks the end of the German postal group’s exclusive licence in its domestic market – its biggest source of profit. After that, German postal services will be opened fully to competition. The threat posed by the deregulation was underlined this month when three of the biggest newspaper publishers in Germany teamed up to launch a group to tackle Deutsche Post in letter delivery. They are promising a national network and cheaper prices. They are also looking for other publishers to join the venture.
Read MoreDeutsche Post AG’s agreed 5.5 bln eur (3.7 bln stg) cash and shares takeover of Exel PLC could be scuppered by rival bids, with American giants United Parcel Service Inc and/or Fedex Corp tipped to spoil the party. Although both Deutsche Post and Exel have agreed a 37.4 mln stg penalty if either side walks away from the recommended offer, the UK group’s board, led by chairman Nigel Rich, has a fiduciary duty to consider any other offers. The German group’s recommended bid is pitched at 12.44 stg a share – 9.0 stg (some 73 pct) in cash with the balance in Deutsche Post shares. Some analysts believe the equity element to the offer could be the deal’s Achilles heel. ‘Despite a mix-and-match agreement potentially watering down the share element for some Exel shareholders, we suspect this will be unpopular and leave the door open to a cash offer from UPS,’ said Alastair Gunn, analyst at Arbuthnot. He reckons major shareholders will likely sit tight until the intentions of UPS, which has reportedly appointed Goldman Sachs to look into the logic of a counter offer, are better known.
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