Deutsche Post unveils EUR 5.5 billion Exel bid
19 September 2005, BONN - Moving quickly to diversify ahead of losing its German postal monopoly, Deutsche Post officially confirmed Monday it is offering EUR 5.5 billion in cash and new shares to buy British logistics rival Exel.
19 September 2005
BONN - Moving quickly to diversify ahead of losing its German postal monopoly, Deutsche Post officially confirmed Monday it is offering EUR 5.5 billion in cash and new shares to buy British logistics rival Exel.
Europe's largest postal service, Deutsche Post said its supervisory board had approved the offer, the purchase price of which entails 72 per cent cash layouts with the balance in new shares.
After the deal is closed, the two companies will control nearly 10 per cent of the world's logistics business. The German group, which owns courier DHL, will lose its German monopoly on standard letter mail by 2007 and has been seeking to diversify.
Exel is the world's largest logistics provider, or contractor handling the shipping, warehousing and delivery of goods and raw materials for other corporations. Its clients include DaimlerChrysler, Volkswagen and Marks & Spencer.
Exel board members held a meeting on Sunday to approve the deal, an executive involved in the talks said.
Exel's chief executive, John Allan, is expected to be given a seat on Deutsche Post's management board, and will head the company's expanded logistics division.
Commenting on the offer, Klaus Zumwinkel, chief executive of Deutsche Post, said: "This transaction is a major strategic step in Deutsche Post's development and represents the continuation of our strategy to become the leading global logistics company."
Nigel Rich, chairman of Exel said: "This offer from Deutsche Post represents an excellent opportunity for our shareholders to realize significant value in cash and, if they wish, to retain an investment in the enlarged group."
Exel chief executive Allan said: "Completion of this offer would create the leading global player in logistics and accelerate progress towards our strategic goals."
Exel has 111,000 employees and facilities in more than 135 countries. The company has been growing through acquisitions, buying 10 companies since 2002.
Deutsche Post, which is based in Bonn, employs 380,000 people worldwide and generated EUR 43 billion in revenues in 2004. In addition to local mail, express mail and logistics, the company has a financial services division.
Express mail is the largest division and accounted for 40 per cent of revenues in the first half of 2005.
Deutsche Post and Exel notified the markets on September 1 that they were in preliminary talks about a deal. Exel's shares have gained 4 per cent on the London Stock Exchange since then.
Copyright DPA with Expatica
Subject: German news