DHL Acquires UK Mail for $315.5 Million
Deutsche Post DHL Group has agreed to acquire UK Mail Group on Sept. 28 for 242.7 million pounds ($315.5 million), enhancing the company’s presence in the e-commerce market in Great Britain.
UK Mail Group’s board of directors will now review the offer from the German parcel and logistics company and put the issue to shareholders. DHL added that the UK Mail Group will recommend that it gets approved.
“The board believes that UK Mail will benefit significantly from becoming part of Deutsche Post DHL and will be better positioned to continue to develop our parcels and mail businesses with the benefit of Deutsche Post DHL’s greater financial and operational resources,” said Peter Kane, Chairman of UK Mail.
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The deal is the latest in an ongoing battle among UPS Inc., FedEx Corp. and DHL to bolster and capitalize on the growing international market.
“With this acquisition, we will further extend our network and have a strong foothold in Europe’s three largest e-commerce markets, the U.K., Germany and France, which account for over 60% of online retail in the continent,” said Juergen Gerdes, board member at Deutsche Post.
Morningstar analyst Matthew Young said the purchase was a sound one as UK Mail grappled with “operational hiccups” and management turnover during the past year.
“From a strategic perspective, the deal falls in line with DHL’s stated intent to continue exporting the operational know-how of its successful German small-parcel delivery operations to other European countries,” Young said. “[It] will now have a solid foothold in the U.K. [Europe’s largest e-commerce market], in addition to pre-existing networks in other key markets enjoying solid online retail exposure such as France and Germany.”
In January 2016, DHL announced that it planned to invest a 27.5% stake in Relais Colis, a French e-commerce logistics specialist. In mid-September, DHL announced a cooperative with Slovenian Pošta Slovenije and the Hungarian Magyar Posta to provide e-commerce services.
In May 2016, FedEx bought Dutch package-delivery firm TNT Express for $4.9 billion. The merger boosted the FedEx ground network in Europe.
In August 2016, UPS announced that it would expand service to 117 countries worldwide and added quicker express service to 52 countries.
UPS ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers. FedEx ranks No. 2. DHL Supply Chain ranks No. 7 on the TT logistics 50 list of largest logistics companies in North America.
