Deutsche Post plans to up stake in DHL to 98.6 percent



Financial Times Deutschland
Deutsche Post World Net AG is planning to acquire by the end of this year an additional 23 percent stake in express carrier DHL for 400 million euro.

It said the transaction has already been agreed by the owners of the stake, an Asian investment fund and a fund unit of WestLB, and will leave Deutsche Post with a stake of 98.6 percent in DHL. The other 1.4 percent is owned by Japan Airlines, who have so far been reluctant to sell out.

In July, Deutsche Post said it is raising its stake in DHL to over 75 percent by acquiring the 25 percent of the company owned by Lufthansa AG for 610 million euro. Meanwhile, the paper added the EU commission is planning to approve the full takeover of DHL by Deutsche Post, despite the misgivings of US rival UPS.


DHL announced expansion plans last month.

DHL Worldwide Express announced last month that it was expanding its global service parts logistics network in the United States and Canada with the opening of an Express Logistics Center (ELC) in San Francisco, CA.

"The opening of the San Francisco ELC marks the beginning of expansion plans for DHL's logistics offering in the U.S. and Canada," said DHL's Vice President of Global Logistics, Charles Menkhorst.

"DHL is the market leader in the provision of mission-critical service parts logistics solutions in regions around the world. Our comprehensive roll-out into North America will secure a global offering for our customers."

In addition to the new San Francisco facility, DHL operates U.S.-based ELCs in Cincinnati and Miami. DHL's ELCs operate in regions around the world including Brussels, Bahrain, Johannesburg, Hong Kong, Sydney and Singapore.

An ELC will open in Tokyo in October 2002. DHL's ELCs serve multiple functions as both value-added regional logistics centers and buffer stock locations to replenish the company's high-density network of Strategic Parts Centers (SPC). The SPCs are strategically located to ensure two- to four-hour deliveries to customers' mission-critical operations. DHL plans to operate 55 SPCs in the U.S. and 330 globally by the end of 2002.


If I recall, DPAG used to claim that they didn't control DHL Airways since they owned less than 25% of the voting power. (DHL Airways is a US based arm of DHL. US carriers are prohibited by law to be owned by foreign interests. Foreign ownership must have <= 25% interest in a US carrier.) Now that they'll own close to 99% of DHL, I'd think that would change things and disqualify DHL Airways. This may also call into question DHL Worldwide Express' status as a freight forwarder in the US. It looks like the lawyers have some work to do. The 2nd article certainly shows that DPAG is aggressively looking to expand their US presence. I'm wondering how the 1st article is going to impact that desire.


Interesting, I agree with you upscorpis, this move seems to impact DHL's "citizenship".


European Union clears Deutsche Post's purchase of DHL shares

The European Union (EU) on Tuesday approved Deutsche Post AG's 610 million euro (US $596 million) purchase of a further 25 percent stake in DHL Worldwide Express Inc., pushing its control in the courier to over 75 percent.

The EU executive Commission said there were only "minor overlaps" between the two companies and therefore posed no antitrust problems.

"Deutsche Post is mainly active in mail delivery in Germany, a market where DHL is not active," the Commission said in a statement.

It added DHL's main activity of international parcel delivery was also not affected by the purchase and would continue to face "sufficient competition from UPS, Federal Express and TNT Post Group."

In a statement, Deutsche Post said it planned to buy the remainder of DHL shares it does not yet control "by the end of the year," adding control over DHL was "strategically pivotal for DHL's further integration as a key player" within the Deutsche Post group.

The company set a price of 400 million euros (US $391 million) to buy the remaining 23 percent stake held by various investors, including the 1.4 percent stake held by Japan Airlines Co. Ltd.

DHL controls around 37.5 percent of the global air courier market. It recorded turnover of 6.2 billion euros.

The DPAG threat is getting bigger. By acquiring DHL, they become the largest global air courier. That's exactly where UPS wants to be.