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Deutsche Post snaps up Exel to create the logistics leader
Page 8
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Britain's biggest logistic company has finally succumbed to a E3.7bn
bid from its German rival Deutsche Post. Jennifer Ball reports.
DEUTSCHE POST has completed a /3.7bn takeover of Exel, making the world's largest logistics group. The German postal group will pay 900p and 0.25427% of its own shares for each Exel share as it attempts to move away from its dependency on German domestic mail delivery before it loses its monopoly in 2007.
Industry analysts have raised concerns that the firm paid over the odds for Exel; more than twice what it paid for DHL two years ago. But Deutsche Post's chief executive Klaus Zumwinkel points out that it is now the world's biggest logistics company.
The deal will boost earnings from 2007, with savings likely to reach €220m (£148m) a year by 2008. Logistics will account for 30% of sales, compared with 24% for mail.
Exel's chief executive John Allan will integrate the two companies' logistics businesses from Exel's base at Bracknell, Berkshire. He points out that the price Deutsche Post was prepared to pay was a crucial factor in the Exel directors' decision to back the hid.
"We think it is a very attractive offer for our shareholders," he adds. "It's a substantial premium to the historic share price."
Exel has long been the subject of takeover speculation; US giant UPS, which recently bought UK rival Lynx Express, was also tipped as a possible bidder. Chris Morgan, Datamonitor's automotive & logistics analyst, adds: "Exel is a strong player in the UK and global contract logistics market, so it was a good company to help Deutsche Post get into the logistics market quickly before deregulation in 2007."