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Deutsche Post Completes Exel Acquisition

German mail and logistics giant Deutsche Post World Net said this week that it completed the acquisition of UK logistics company Exel plc, an air freight, ocean freight and contract logistics company.

The Frankfurt-based company said combining the two businesses creates a group with 500,000 employees and $65.8 billion in revenue.

“By bringing together these two … organizations, we are creating the largest logistics company in the world,” Deutsche Post CEO Klaus Zumwinkel said in a statement. “Our top priority now is to combine DHL Logistics and Exel in a rapid and efficient manner.”

Exel CEO John Allan will run the combined division, which will have 150,000 employees. It will be based in Bracknell, near London. The DHL-Exel merger is expected to take two to three years, with most of it completed within the first 12 months. The company expects $263 million in annual gross cost synergies by 2008.

The enlarged logistics unit will operate under the DHL brand. After the merger, DHL will operate with two logistics brand areas: DHL Exel Supply Chain and DHL Global Forwarding. A rebranding campaign begins early next year.

Upon completion of the Exel transaction, Deutsche Post raised its target for operating earnings. The company now said it expects 2005 earnings before interest and tax of at least $4.43 billion, up from $4.31 billion.

For the Mail Corporate division, Deutsche Post sees EBIT stabilizing at $2.39 billion. In the Express division, it foresees operating earnings, including the Americas region, of $597.8 million, an improvement of $155.4 million versus last year.

But in the United States, the September combination of two hubs led to additional expenses so the company now expects the Express Americas unit to post a 2005 loss of less than $478.2 million.

Also this week, DHL began the DHL Partnership Customer Activation Resolution and Enhancement Program to ensure that customers with complex shipping and logistics needs have dedicated support during the startup process, as well as throughout their relationship with DHL. Early CARE participants have come from the fashion, lawn and garden, cosmetics and electronics industries. DHL said the program will be extended to small and midsize DHL customers with complex shipping needs.

Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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