An Post is believed to have spent more than €9 million acquiring a privately owned mail company in Britain.

The State postal company would not disclose the consideration paid for Air Business Ltd, a Hertfordshire-based provider of mailing and distribution services for the publishing, direct marketing and print industries. But informed sources said An Post paid about £6 million sterling (€9.37 million) for the business, just over half its £11 million turnover last year.

An Post said the acquisition would give it access to skills in the mail-preparation business and to international networks catering for urgent deliveries of mail and publications.

Air Business provides international and domestic mailing, and distribution and data-processing services. Clients include the owners of political publications the Spectator and the New Statesman and shipping newspaper Lloyds List.

It employs 100 staff at Colchester and St Albans, Hertfordshire, not far from Heathrow, Stansted and Luton airports.

The deal is thought to have been sanctioned by the Government in recent days after scrutiny by the Department of Finance and the Department of Communications, Marine and Natural Resources.

It marks a further foray into Britain for the loss-making postal group, which is seeking to cut its staff by 1,140 in a reform programme.

In February, it acquired e.Commercell, a maker of machines that recharge mobile phones with credit, for about €7 million.

While An Post's monopoly services are loss-making, its non-reserved businesses are in profit.

It has acquired a number of privately run firms to establish itself in niche markets. They include two Dublin courier firms, acquired for some €14 million in 2000.

An Post's chief executive, Mr John Hynes, said in a statement yesterday: "Ownership of Air Business, which is a well-managed, growing and profitable company, will provide us with new skills, which are essential to the future growth and prosperity of the An Post group."

He added: "International mail is of vital importance to An Post as 28 per cent of our mail revenue is international. It is a growth business."

An Post's operating loss last year was €6.7 million on revenues of €625 million.

It has initiated a recovery plan but projects a €37 million deficit this year and a €27 million deficit in 2003.