Deutsche Post Global Mail Acquires U.S. WorldMail Service from DHL

Deutsche Post World Net announced several acquisitions as it positions itself for the scheduled loss of its domestic letter-delivery monopoly in Germany by 2007.

Deutsche Post will pay $597.9 million to buy the 25 percent stake in DHL International held by Lufthansa Cargo. The acquisition still has to be finalized by the companies and approved by Germany 's antitrust authorities. If approved, the purchase will increase Deutsche Post's stake in DHL International from 50.6 percent to 75.6 percent, though the company said it intends to acquire the rest of DHL International at some point.

“We want to completely cover the needs of our international customers and work more economically,” Klaus Zumwinkel, chairman of the board of management at Deutsche Post World Net, said in a statement. “Full control of DHL is a very important constituent.”

International mail services company Deutsche Post Global Mail, a division of Deutsche Post World Net based in Sterling, VA, acquired DHL Worldwide Express' U.S. WorldMail Service. Financial terms were not disclosed. It acquired DHL's WorldMail service outside the U.S. earlier this year.

The U.S. WorldMail Service consists of two offerings: WorldMail First Class and Air Printed Matter, now known respectively as Deutsche Post Global Mail Priority and Deutsche Post Global Mail Standard. DHL will continue to handle mail pickup, billing and customer service while Deutsche Post Global Mail will process the mail and distribute it to the destination country.

Deutsche Post also said that it is setting up a joint mail distribution venture with Dutch publisher Wegener NV, though Deutsche Post will hold a majority in the venture. Both companies will merge their Dutch letter delivery businesses and work together on marketing and sales.

Deutsche Post also will take a majority stake in Wegener's Interlanden BV, which distributes free advertising and door-to-door newspapers in the Dutch mail market. Wegener is privately held and Deutsche Post did not release the cost of the transaction. Analysts said Interlanden generated revenue of roughly $56 million in 2001 and has 450 employees.

Meanwhile, German postal regulator RegTP asked Deutsche Post last week to cut its postal prices beginning next year. The price reduction is expected to be 7 percent. Deutsche Post then warned that this could lead to lower profits, post office closures and thousands of job cuts.

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