The German company’s acquisition strengthens its grip on European postal market and will put further pressure on Royal Mail in U.K.
The deal is likely to intensify competition in Britain’s postal market as Europe’s largest mail and logistics group, Deutsche Post DHL Group, reaches an agreement to acquire UK Mail Group, one of the largest integrated mail and parcel operators within the UK.
UK Mail was founded by Chairman Peter Kane in 1971, a family run business that turned a Harrow taxi firm into a postal company, competing with the Royal Mail, are in line for a £120m windfall after an agreed bid from Deutsche Post.
Deutsche Post DHL Group’s cash offer of £4.40 per share values UK Mail at £242.7 million which represents a premium of 43.1% over the closing price per UK Mail share on 27 September 2016
Kane commented: “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,”
”There will be significant synergies including additional volumes flowing through our network from Deutsche Post DHL’s global operations.” He continued.
Kane, who recently passed his remaining stake to his family will see no direct benefit from the deal. The biggest winner from the takeover will be Kane’s son John, who will receive £60m. His brother Michael, who used to be involved in the business, is set for £23m, his ex-wife Ghislaine £14m and his daughter Joanna Bailey and her husband £13m. With other family members including a young son, the Kanes own just over 50% of the business between them.
Deutsche Post DHL said the acquisition would “bring its expertise in e-commerce and parcel delivery together with UK Mail’s existing customer base and network, to drive substantial shareholder value”.
It said the acquisition of UK Mail “strengthens the European market position of DHL Parcel, adding a commercial and operational presence, including pick-up and delivery capabilities, in the UK, Europe’s largest e-commerce market, enhances Deutsche Post DHL Group and UK Mail’s customer value propositions”, strengthens UK Mail’s UK market position, and “delivers significant synergy benefits”.
Juergen Gerdes, Deutsche Post DHL Group board member, said: “The on-going expansion of our parcel network in Europe is driven by increasing demand within our e-commerce customer base for cross-border deliveries. Deutsche Post DHL Group, as the leader in the German parcel market, has already established a strong position in a number of European countries.
“UK Mail is a well-run business and an established provider of quality delivery services in the UK and offers a complementary fit with our integrated offering. With this acquisition, we will further extend our network and have a strong foothold in Europe’s three largest e-commerce markets, the UK, Germany and France, which account for over 60% of online retail in the continent.”