British authorities have approved the sale of DHL Express’ domestic parcel business to HomeDelivery Network (HDN), paving the way for the transaction to be completed by the end of the first
quarter.The Office of Fair Trading (OFT), which is responsible for reviewing mergers and acquisitionsin the UK, cleared the DHL-HDN deal on February 15, according to information on its website. Nodetails of any conditions for approval were listed. The deal had been announced on January 5 andofficially notified to the authority on January 19.
The sale of the UK domestic parcel delivery business is part of DHL Express’ current strategyof disposing of loss-making domestic day-definite parcel businesses in order to concentrate onprofitable international express and premium services. It has already quit the US and Irish marketsand aims to sell the French express business to investor Caravelle within the next few weeks.
Under the agreement with HDN, the DHL domestic B2B and B2C parcel delivery business ‘DHLDomestic’ will be taken over by HDN, including all employees and facilities, by the end of thefirst quarter of 2010. DHL Domestic currently employs some 4,700 people and operates five hubs aswell as 71 Service Centres spread throughout the UK.
The combined businesses will have annual sales of more than £600 million delivering more than180 million parcels a year. HDN, which will continue to use the DHL Domestic brand in the shortterm, has pledged “a sizeable investment to ensure the businesses achieve their long-termprospects”. The acquisition will turn the B2C specialist into an all-round supplier enabling it tocompete more strongly with Royal Mail and other parcel carriers.
In future, DHL Express will fully concentrate in the UK on its Time Definite Internationaland Same Day express services, both internationally and throughout the country.
