GLS has won the battle to buy ABX Belgium Distribution and become the largest B2B parcel company inBelgium. GLS apparently outbid TNT to seal the deal. The acquisition price was not disclosed but
was put at about EUR 23 million by Belgian media.The Royal Mail European parcels subsidiary announced that Belgian Railways (SNCB/NMBS), theABX parent company, signed the sale contract with it yesterday. This was the deadline imposed bythe European Commission one year ago.
“Today’s transaction means we will be able to combine GLS’ European competence with ABXBelgium Distribution’s regional strength,” explained Rico Back, CEO of GLS B.V., Amsterdam. “ForGLS, attaining market leadership in Belgium means that the network in central Europe is beingdecisively strengthened. For ABX Belgium Distribution, the link to the GLS European network willresult in new growth opportunities.”
Belgian Railways was forced to dispose of the entire ABX group of companies as a condition ofgaining EU approval for past state aid for restructuring measures at the logistics group. The saleof ABX Belgium Distribution was conducted as a bidding process which also attracted the interest ofTNT, Germany’s trans-o-flex and other European parcel operators.
GLS, with annual revenues of EUR 1.5 billion in 2005/06, is taking over the parcel andgeneral cargo business of ABX Belgium Distribution, which generated revenues of approximately EUR90 million in 2005. The parcel business accounts for about two-thirds of these revenues. Thecompany has more than 650 employees at a total of nine locations (including a hub in Brussels), afleet of 560 vehicles and a customer base of 8,000 companies.
Together, GLS Belgium and ABX Belgium Distribution will have a share of almost 35% in thecountry’s B2B parcel market, making them the indisputable market leaders. The other leading playersare DHL (with an estimated 28% market share) and Belgian Post (about 11%), GLS disclosed. While ABXBelgium Distribution mostly handles shipments in the Benelux region, with only a small percentageof exports, GLS is positioned as a parcel service provider that operates throughout Europe.
The deal will expand GLS’ product portfolio in the Benelux countries. “This transaction putsus in a position not only to offer our customers a number of products and services both on theregional and European level but also combined parcel and general cargo distribution,” Back pointedout. “This is especially attractive in the Benelux countries, because customers here like toreceive these services from one source.”
The employees of both companies will also benefit from the transaction. Up to now, GLSfocussed strongly on exports and ABX Belgium Distribution’s service was mainly concentrated in theBenelux region. The two companies complement each other – layoffs due to internal restructuring arenot planned and all employees will be retained. Pending further notice, the name ABX BelgiumDistribution will remain in force.
At an operational level, there are plans to implement the GLS Group’s unified European ITsystem and to adjust the production system to meet GLS quality standards. In addition, themanagement of both companies is checking to see if it makes sense to separate delivery in theParcel and General Cargo divisions. This would only be an option if it improves the efficiency ofthe processes.
