German Post Seeks Record Sales Before Going Public
Results for the company, still owned by the German government, were made public at last month's CeBIT computer show held here. Sales in 1999 were up 50 percent. Profits were DM 1.3 billion ($700 million) and will be much higher this year, a postal spokesman said.
The German Post also plans a name change. It will appear on global markets as "Deutche Post World Net" except for Danzas, its worldwide air freight subsidiary, and the domestic postal bank, which will retain their names.
Operations will be divided into four major divisions: mail, express delivery, logistics and finance. Logistics is the focus of expansion plans where the Germans want to become No. 1 in global air freight and in European ground transport.
The Germans have spent more than $6 billion over the last two years to build an air and road network, as well as buying companies across Europe and in the US where Air Express International was their latest acquisition.
Most of the money, however, still seems to come from mail deliveries, which rose 4 percent last year to 21 billion pieces, a fact that has raised charges of cross-subsidies and cases to the European Court of Justice.
How large a slice of outstanding shares will be put on the market "is still under discussion," Post CFO Edgar Ernst told reporters here. The Financial Times Germany reported it would be 35 percent, a figure Ernst called "nonsense."
As for Deutsche Post's logistics plans, media reports persist that the post office is talking to Lufthansa (LH), the German airline, about merging its three logistics divisions - DHL Intl., Lufthansa Cargo and AEI.
Lufthansa and Deutsche Post won 25 percent each of DHL Intl. and Lufthansa Cargo is eking out too slim a profit for LH managers, one reason given for the proposed merger.
The merged company would have sales of DM 17 billion ($8.6 billion) and become the world's largest air freight forwarder, larger than the two US behemoths UPS and Federal Express, and the Dutch-owned TNT.
The FT reported that the two companies had been in negotiations for the last four months and that the project had been code-named Pelikan.
The German news magazine "Der Spiegel" dug up documents laying out plans to avoid paying several hundred million marks the government could levy on any holding company formed to run the air freight business.
Neither Deutsche Post nor Lufthansa would comment on the report, which received wide currency in the German media. The FT's German edition launched last month. It has tried to generate headline making news and done so with some success.