French Post Buys German Parcel Service

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France's La Poste moved last month to shore up its position in Germany -- Europe's biggest postal market -- through the acquisition of DPD, one of the country's largest private parcel delivery services.

La Poste has had a 50 percent stake in the company for some time, but taking full control gives it a parcel network in four other countries -- Switzerland, Spain, the Netherlands and the Czech Republic.

DPD was already the second-largest European operator in delivery of business-to-business single rather than bulk parcels, La Poste CEO Martin Vial said. It handled 330 million parcels in Europe last year, an increase of 3 percent. Of those, 200 million were in Germany, an increase of 6 percent.

"The new acquisition fits into La Poste's strategy of building a powerful European single parcel delivery network," Vial said. "It puts La Poste in the second rank in Germany and in Europe in the rapid single package delivery market."

In all, La Poste acquired DPD's six subsidiary companies. The move boosts the share of the company's foreign parcel business to 38 percent of its total parcel revenues, Vial said.

Analysts said, however, that La Poste was still an also-ran among Europe's major postal administrations. It started late in the global postal business and is far behind the big three of Germany, the United Kingdom and Holland.

In Germany it faces competition not only from the giant Deutsche Post, which has built a worldwide network of parcel and mail delivery services, but also from Royal Mail.

The German Post declined comment on the appearance of a new foreign competitor, but sources said management dismissed the French as irrelevant. The Germans already have a strong presence on the French market.

La Poste has major problems that limit its freedom of action. It is not limited to France, however, and has already helped block greater postal liberalization within the European Union.

Unlike Deutsche Post, which has 29 percent of its shares on the stock exchange and is run like a private business, La Poste is fully government-owned and nobody in France talks about privatization.

It has 250,000 employees, a work force that has great redundancies and could easily be reduced to achieve greater efficiencies, postal experts say. With unemployment still high, France cannot afford to do that.

But the French also know they have to go international to compete and therefore take hesitant steps like this acquisition to do so. It's not enough, experts said.


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