India’s leading express delivery firm Blue Dart has denied reports that Amazon is interested inacquiring DHL’s 75% majority stake in the company for a possible $2 billion to gain a massive
delivery operation in the booming Indian e-commerce market.Amazon has so far invested $2 billion into its relatively young India operation to take on thetwo locally-based e-commerce market leaders Flipkart and Snapdeal, while China’s Alibaba Group isreportedly set to spend $500 million on Indian mobile payment firm Paytm.
Indian business newspaper Economic Times reported yesterday that the US e-commerce giant is in “preliminary talks” to buy the 75% majority stake in the listed company, which could cost it up to$2 billion based on current market prices.
“Amazon is evaluating options to buy out the 75% promoter stake held by DHL Express SingaporePTE Ltd in Blue Dart and the talks are currently at an early stage and it may or may not fructifyinto a deal. If the transaction materialises, it will help Amazon expand its overall customerreach, beef up its delivery services and provide an edge over domestic rivals Flipkart andSnapdeal,” the newspaper cited ‘an individual’ as saying on the condition of anonymity.
But in a filing to the Bombay Stock Exchange, Blue Dart Express stated: “We have been informedby DHL Express Singapore Pte. Ltd. that they are not now engaged in negotiations to sell theirstake in Blue Dart to Amazon or any other party, nor they have engaged in such negotiations inpast.”
A Deutsche Post DHL spokesman told CEP-Research: “As a policy matter DP DHL does not comment onrumours or speculation about M&A transactions.”
However, any sale of Blue Dart, the leading air express company in India with an estimated 52%market share, would be a massive reversal of Deutsche Post DHL’s strategy in India, according toexperts. The German-based group bought the majority stake in Blue Dart through DHL ExpressSingapore several years ago to expand its express operations in India.
At the start of 2014, Blue Dart, mostly a B2B firm with a growing B2C business, was transferredto the new DHL eCommerce unit as part of the group’s ambitions to develop e-commerce deliveryactivities around the world.
Last August, DP DHL announced plans to invest €100 million in India over the next two years totarget the country’s fast-growing e-commerce market. India was selected to pilot the development ofthe group’s e-commerce business model for Asia-Pacific through Blue Dart Express as this wasalready a national leader in door-to-door delivery.
Under the plans, DHL eCommerce, working through Blue Dart, would invest in infrastructure,including about 15 e-fulfillment centres, as well as multiple delivery and payment options as partof its aim to become the preferred global provider of e-commerce related services includinge-fulfillment and e-facilitation.
Blue Dart Express, with more than 8,800 staff, delivered 127 million shipments in the 12 monthsending March 2014. It serves more than 34,000 locations across India using a fleet of nearly 9,000vehicles and six freighters, and a ground network of 65 hubs and some 550 retail outlets.
