Deutsche Post is buying Exel Plc for an agreed £3.7 billion pounds ($6.7 billion) to boost its position in the fast-growing contract logistics market and make up for falling sales at home.
The German group, which owns courier DHL and is set to lose its German monopoly on standard letter mail by 2007, said today it would pay 72 per cent of the purchase price for the British firm in cash and the rest in new shares.
To help pay for the deal, Deutsche Post will increase its share capital by around 7 per cent. The cash portion will be paid from the German mail group's current liquid funds, which it said were almost €5 billion.
Deutsche Post shares fell 2.6 per cent amid concerns the firm may overpay, and it was one of the biggest decliners on a German blue-chip DAX that was 1.4 per cent weaker after the inconclusive result of a German general election.
