Deutsche Post World Net (DPWN) has denied media reports that it might withdraw from the USmarket but declined to comment on reports that it is in talks with FedEx about a partnership.
DPWN CFO John Allan was cited in international media over the weekend as saying there was “noquestion of exiting the US business. Any options which include a withdrawal can be completely ruledout”.
The company wanted to retain “a significant presence” in the USA but had to reduce the operatinglosses, Allan was cited as saying. There were “a large number of ways” to achieve this goal. But hedeclined to comment on “speculation” about the potential plans.
His statement followed a report in the Financial Times Deutschland on Friday that DPWN was intalks with FedEx over a partnership to reduce the heavy losses of DHL Express in the USA. DPWNexecutives wanted FedEx to take over DHL Express’ domestic US operations, and in exchange, DHLExpress would provide services in Europe for FedEx, the FTD reported.
On January 23, DPWN announced that it will write down the value of DHL Express Americas by EUR600 million in its 2007 results due to the loss-making US business. The group said that it iscontinuing to identify the “optimal solution” to improve the performance of the US expressbusiness.
Influential analysts recently called on DPWN to downscale its US express operationssignificantly to reduce long-running heavy losses. Last November, due to the increasing impact ofthe slowing US economy, DPWN scrapped the target of achieving a breakeven in the USA by 2009.
