Update: Deutsche Post-AEI Merger Challenges Global Dominance
Air Express' strength is in shipments to and from the United States. Analysts said the acquisition would allow Deutsche Post to increase its share of the U.S. shipping market. Its weak spot, however, will remain the lack of a strong domestic distributor.
The $1.14 billion merger, which is subject to U.S. and European regulatory approval, would create the world's largest coordinator of airfreight shipments. It has been approved by the boards of Air Express, Darien, CT, and Deutsche Post AG, Frankfurt.
Deutsche Post plans to integrate Air Express into its Basel, Switzerland-based Danzas Holding AG subsidiary, a freight forwarding unit, creating a unit with $7.4 billion in annual sales. Deutsche Post bought Danzas late last year for $1 billion.
Renato Chiavi, head of Danzas' intercontinental business, will become CEO of the combined unit, to be called Danzas-AEI. Guenter Rohrmann, Danzas' current CEO, has been named vice chairman of Danzas-AEI and will oversee the units' integration.
Shareholders in Air Express would receive $33 a share. Shares of the stock have risen from about $26 in late October, when rumors of the takeover first surfaced.
The planned acquisition is the latest consolidation in the air cargo market. Deutsche Post, which is seen as the most aggressive of European post offices, has been buying logistics and distribution companies across Europe during the past 18 months. The company has a 22.5 percent stake in DHL International Inc., an air-express company in Brussels that is under umbrella company DHL Worldwide Express, Redwood City, CA.
Air Express, which manages shipments that move on other companies' air fleets and doesn't own any ships or aircraft, posted revenues of $1.5 billion last year. The Deutsche Post group is expecting sales of $29.3 billion in 2000.