German media group Axel Springer is buying a majority stake in private mail operator PIN Group forEUR 510 million to position itself as the leading competitor to Deutsche Post in the domestic mail
market. Other media groups will buy into PIN and merge in their mail activities later this year.The German domestic mail market is due for full liberalisation in January 2008.Springer, publisher of the mass circulation Bild-Zeitung, will increase its existing 23.5%stake to 71.6% by acquiring the holdings of PIN Group co-founders WAZ Media Group, Georg vonHoltzbrinck Publishing Group (“Handelsblatt”) and Rosalia AG. The sellers as well as VerlagsgruppeMadsack will remain shareholders and cooperation partners in PIN Group, and Günter Thiel willremain as CEO.
In a statement, Axel Springer AG added that further shares would be issued to regionalnewspaper publishers by September 2007 in return for them contributing their postal servicebusinesses. WEST MAIL Holding GmbH, a joint venture of Unternehmensgruppe M. DuMont Schauberg,Unternehmensgruppe Rheinische Post and publisher W. Girardet, will become a shareholder in PINGroup. Other regional newspaper publishers will also contribute their mail service businesses.Following this, Axel Springer AG’s stake will be reduced to an estimated 63.7%.
Dr. Mathias Döpfner, Chief Executive Officer of Axel Springer AG, said: “PIN Group is anattractive investment for us in a very fast growing business. As founding shareholders we are veryfamiliar with PIN Group and its potential and are now taking the opportunity to transform ourminority stake into a majority shareholding.
“Together with the original and future shareholders we want to benefit from the furtherliberalization in the mail services business. We want to build PIN into another strong pillar ofAxel Springer, next to our content business in print and online media, leveraging our provenexpertise in distribution.”
PIN Group AG was founded in September 2005 by Axel Springer AG, WAZ Media Group, Georg vonHoltzbrinck Publishing Group and Luxembourg-based Rosalia AG, when the stakeholders bundled theirrespective mail service activities.
Today, PIN Group is the second-largest provider in the German mail services market. The Grouphas more than 60 regional subsidiaries, and in 2006 became a national integrated provider bysetting up an efficient nationwide distribution network. PIN currently covers around 96 percent ofGermany primarily through its own distributional networks complemented by regional co-operations.As of April 30, 2007 the company had more than 7,000 full-time employees.
PIN Group AG reported consolidated revenues of EUR 168.3 million for the 2006 financial year.The Group generated 68% of its earnings through regional mail services and the remaining 32% comingfrom national mail services. In the first quarter of 2007 the company’s revenues rose to EUR 71.3million from EUR 30 million one year earlier. Its volumes grew from 700,000 mail items per day inJanuary 2006 to 2.3 million items per day in January 2007.
The company expects revenues to more than double to EUR 350 million in the current year. Onthe basis of market share growth PIN Group aims at achieving revenues of EUR 1.5 to EUR 2 billionby 2015.
