British Post Office Buys French Company
The new acquisition is the Paris-based Crie group of postal companies which specialize in delivery of domestic French and international express mail. The British paid 6 million pounds (about $10 million) for the company.
"The potential exists for further payments dependent on the future commercial performance of the business," a British Post Office statement issued after the acquisition said. It added that "further deals are under active consideration."
"This latest acquisition underlines The Post Office's determination to build a powerful global network providing our customers with an integrated range of international services," said John Modd, the managing director of such services for the UK Post.
The British have been trying to catch up with the Germans who have bought everything in sight over the last couple of years, spending upwards of $6 billion since buying VA-based Global Mail in October of 1998.
The problem the British face is money. It had to borrow funds to buy Crie. Although the post office has been largely privatized and is profitable, payments to the government and other regulations have crimped its ability to match the German wheeling and dealing.
A strategic alliance it concluded in October with Air Express International, a major US global logistics company active in 135 countries, fell apart a month later when Deutsche Post moved in and bought the company for $1.14 billion.
This has left the British looking for strategic niche markets and building up a network of smaller companies covering larger areas of the business.
"We're looking at the best investments we can make," said Stephen Davie, the director of Royal Mail's international communications. "We're picking up companies that can be put together into a good network for us.
"We're looking for niche players who can give us the services we need so we're putting together a number of companies rather than buying out one major company that may or may not meet all our needs in all markets.
"France is an important market for us, which is why Crie is so important. We've worked with the company before and know their potential."
The Crie group has several divisions - Redmail S.A., a delivery service for addressed mail and postal items in the Paris area, Systeme C S.A, which provides facilities management and mailroom services and Crie Multi Services S.A, dedicated to international mail service.
Last November the British Post Office bought the Citipost Group, a New York document and publications delivery company with operations in Europe, North America and the Pacific rim for $40 million.
The idea behind the acquisition was to improve Royal Mail US's alternative delivery capability and giving customers a greater choice of products. Royal Mail is a subsidiary of the British Post Office.
Modd said at the time that international mail market developments made it imperative that major players be able to "offer choice and alternatives to their customers."