Deutsche Post plans to buy Exel

Deutsche Post plans to buy Exel

   Deutsche Post, Europe's largest postal service and owner of DHL, a provider of package delivery and logistics services, said Monday it will buy Exel, a U.K. logistics company, for 5.5 billion euros ($6.73 billion).

   Approximately one-fourth of the asking price will be in Deutsche Post shares. Exel board members approved the deal at a meeting on Sunday.

   John Allan, chief executive of Exel, will lead an expanded logistics division that is expected to be merged into the logistics units of DHL. Allan will also be given a seat on the management board of Deutsche Post.

   The acquisition will create the world's largest logistics provider. Deutsche Post, based in Bonn, Germany, has 380,000 employees worldwide. Exel has 111,000 employees working in 135 countries.

   Deutsche Post has been diversifying its operations prior to losing its postal monopoly in Germany in 2007. After purchasing Exel, Deutsche Post will control about 10 percent of all logistics business globally.

   The anticipated acquisition has been the subject for months of industry rumors, the latest being that UPS would make a late bid for Exel over the past weekend. That did not occur.

   Exel itself has acquired 10 companies since 2002, including Tibbett & Britten, a major U.K.-based competitor. For its part, DHL is spending $1.2 billion to increase its logistics operations in North America.

   Morgan Stanley acted as a financial adviser for Deutsche Post. Merrill Lynch and UBS counseled Exel.