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ecuricor deal with Germany

5th November 1998
Page 7
Page 7, 5th November 1998 — ecuricor deal with Germany
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by David Craik • Securicor has sold 50% of its distribution division to the German state-owned post office Deutsche Post for £223m.

Securicor group chief executive Roger Wiggs says the two companies will form a joint venture to move business parcels between the UK and Ireland and the Continent.

Under the terms of the deal Securicor will handle all business parcels traffic originating through Deutsche Post's European network for the UK and Ireland.

In return, Deutsche Post will deliver business parcels originating from the UK and Ireland throughout the Continent. Securicor will continue to handle all its domestic mail.

"We hope this venture will become market leader in the fast-growing UK/Continent cross-border parcels market," says Wiggs. "I expect that in three to five years this market will be led by a small number of international carriers."

Securicor believes its best way into this market is through this venture with Deutsche Post: it follows the recent acquisition of TNT by Dutch postal service PTT Post Nederland.

Pat Howes, executive chairman of Securicor Distribution, stresses that no drivers will be made redundant by the move. "We expect there to be more job opportunities for drivers when we receive and generate increased parcel movements," he says.

The joint venture will be subject to EU competition clearance and is still subject to shareholder approval. Deutsche Post already owns 25% of parcels rival DHL.

The deal is bound to add to pressure on the UK Government to allow the Post Office greater commercial freedom in order to develop its Parcelforce business.

Wiggs reports that profit before interest and taxation for Securicor Distribution for the year ending 30 September is estimated to be £.24m, compared with last year's figure of 1.:30.1m. He blames the decrease on "poor economic conditions".


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