Deutsche Post in talks with Exel
Deutsche Post, the German postal monopoly that is battling FedEx, UPS, TNT and others for global logistics dominance, has entered discussions to acquire British third-party logistics giant Exel, both companies said in brief statements posted on their Web sites.
Both sides emphasized that talks are at an early stage and that no outcome can be predicted.
Exel said it has “received an approached from Deutsche Post which may or may not lead to an offer being made for the company.”
Exel has been on a buying spree of its own in recent years, moving beyond its traditional freight forwarding capabilities into contract logistics and in the process becoming one of the biggest non-asset-based logistics players in the world. It is the result of the merger in 2000 between NFC plc, the parent company of Exel, and Ocean Group plc, the holding company for MSAS Global Logistics.
A combined Deutsche Post-Exel would be a formidable logistics company that could offer shippers completely integrated services from ocean and air freight forwarding, to warehousing, distribution, global trade management, and express parcel delivery. Deutsche Post has rapidly built up its logistics portfolio with the acquisitions of DHL, AEI, Danzas and Airborne Express.
In January, Exel was the target of rumors on the London financial market that UPS, Deutsche Post or another logistics provider was trying to buy the company. Exel officials dismissed the speculation, saying British law requires any such contacts that could affect stock prices to be publicly disclosed, which was the purpose of today’s announcement.
Exel shares rose 17 percent on today’s news, putting its value at $6.25 billion. London stock traders are speculating that the Deutsche Post talks could spur a rival bid from UPS, according to Reuters.
Exel had sales of '6.3 billion ($11.4 billion) in 2004. Exel’s revenue was up 45 percent in the first half of 2005 to '3.6 billion ($6.6 billion) and profits were up 55 percent to '90.5 million ($165.9 million).