German mail and package delivery company Deutsche Post AG said Monday it will take over British-based Exel PLC for Ђ5.5 billion (US$6.7 billion), making it the No. 1 company in the global logistics industry.
The deal, which still has to be approved by Exel shareholders, is Deutsche Post's biggest international acquisition and comes as Europe's biggest postal service provider is trying to reduce its dependence on its German mail operations, according to the AP.
"This is a logical step in our corporate strategy and enables us to diversify our services and become less reliant on our domestic mail business," Deutsche Post Chief Executive Klaus Zumwinkel said at a news conference.
He said the deal would reinforce Deutsche Post's logistics business at a time when the company is expecting its mail business to decline. The company is due to lose its monopoly on the German mail business in two years.
John Allan, chief executive of Bracknell, England-based Exel, said that the board had provided "irrevocable" support for the offer and urged shareholders to approve the merger.
However, Allan, who will lead the integration process and remain head of the newly combined logistics activities, said the Exel board would consider any potential rival offers.
"This transaction is recommended by our board unanimously, but equally our board is mindful of its fiduciary responsibilities and if other offers came along we'd obviously have to give them appropriate consideration," he said.
Analysts have suggested that U.S.-based UPS Inc. could make a rival bid for Exel.
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