DEUTSCHE POST ACQUIRES AIRBORNE’S U.S. GROUND OPERATIONS FOR $1 BILLION

DEUTSCHE POST ACQUIRES AIRBORNE’S U.S. GROUND OPERATIONS FOR $1 BILLION    Deutsche Post World Net, the German postal and logistics group, is acquiring through its subsidiary DHL the non-airline activities of Airborne Inc. for $1.05 billion in cash.
   The transaction, which is subject to shareholder and regulatory approvals, is the latest $1-billion purchase of a major player in the logistics and transport industries, and follows Deutsche Post’s acquisitions in recent years of Danzas, AEI, DHL and others.
   In a statement issued on Wednesday, Deutsche Post said the transaction would create “a strong No. 3 in the U.S. market to compete with the dominating players.”
   In a joint statement, DHL and Airborne said UPS and FedEx have a combined 79 percent share of the U.S. express delivery market.
   Under an agreement between DHL and Airborne, the entire non-airline related business activities of Airborne would be sold to DHL and marketed under that name. The airline business, because of U.S. regulations on nationality, would be separated and become a new company, ABX Air, owned by Airborne’s current shareholders.
   “The transaction will provide DHL with a comprehensive network covering North America, the world’s largest market for express delivery,” Deutsche Post said.
   The group wants to capitalize on DHL’s strong position in international markets and Airborne’s domestic strength in the U.S. market. Airborne has a 19-percent share of the U.S. overnight delivery market. In 2002, Airborne delivered some 356 million domestic parcels.
   “We are going to combine the importance of the world’s market leader DHL with the strength of Airborne in the U.S.,” said Klaus Zumwinkel, chairman of Deutsche Post. “That’s how we create a strong No. 3 in the large and profitable U.S. market.”
   Deutsche Post said a new DHL company incorporating Airborne’s non-airline activities and ABX Air would enter into a service agreement.
   Carl Donaway, current chairman and chief executive officer of Airborne, will manage the DHL company, leading a management team from both Airborne and DHL.
   Shares in Deutsche Post fell on Wednesday following the announcement of the $1-billion acquisition.