ALAN PEAT AS THE bid of R24.05-billion by Germany’s Deutsche Post for UK-based Exel was confirmed last week, the head of DP defended the price – pointing out that the combined companies created the world’s biggest logistics operation. The deal will push the former parastatal - floated five years ago and now majority-owned by private and institutional investors - into the number one positions in supply chain management as well as air and sea freight. Although it is more than twice the R10.4-bn the group paid to acquire DHL two years ago, DP chief executive Klaus Zumwinkel supported the bid for Exel – saying that the combined logistics business and parcels operation would provide attractive earnings growth rates in the future, and offset stagnant profits from the core mail division. He also stressed that major industries were now global in nature, and they expected any logistics operations they dealt with to be equally global. DP said the deal had substantial benefits in terms of geographical reach, with its own strengths in Europe and Asia complemented by Exel’s presence in the UK and US. The only likely counterbidder is UPS, but, said Exel’s CE, John Allan - who is to integrate the two companies’ logistics businesses at a UK base after the European Commission (EC) approves the deal – no other approaches, either formal or informal, have been made. Job losses will not be a major factor, Allan added. While there would be some cuts, he highlighted Exel’s growth since it was created by the merger of NTL and Ocean Group in 2000. “At that time we had about 50 000 employees,” Allan said, “now we have some 111 000. “On past experience we are optimistic about continuing to increase the numbers of people.”
