German Post Office Plans to Split Up Nedlloyd Units

PARIS — Germany’s state-owned postal service, which has spent more than $2 billion in the last year acquiring freight transportation companies, announced it will shell out another $580 million for Royal Nedlloyd’s European land transport and distribution businesses.

Deutsche Post and its recently acquired partner, Danzas Management AG, plan to split up Nedlloyd’s European Transport and Distribution unit, which operates as Van Gend & Loos. The parcels part of the business will be incorporated into DP and the LTL business will be managed by Danzas.

In 1998, Van Gend & Loos produced about $1.6 billion in revenue and had profits of about $35 million.

Klaus Zumwinkel, chief executive officer of DP, said this acquisition will strengthen the postal service’s European parcels network, particularly in Holland and Belgium, where the company’s archrival, the privatized Dutch postal service, TNT Post, is dominant.

“Our high-quality European parcel network can now be extended to the Benelux countries thanks to the Van Gend & Loos parcel services,” he said.

“By acquiring Nedlloyd ETD, we are extending our leading market position in logistics,” said Peter Wagner, chairman of Danzas Management. “Furthermore, we are strengthening our LTL business in Germany in particular.”

The deal is expected to spark another official protest by United Parcel Service Europe, which has challenged DP’s string of investments over the last year with European Union competition regulators. UPS alleges Deutsche Post has used profits from its letter monopoly in Germany to illegally cross-subsidize acquisitions of private companies.

As part of the deal, most of Nedlloyd ETD’s top management will be retained, according to DP.

The land transport division’s sale leaves Nedlloyd with little more than its shipping line joint venture with P&O PLC of Britain. The joint venture, known as P&O Nedlloyd, reported a profit of about $55 million in the fourth quarter of 1998.