Bpost has admitted defeat in its efforts to acquire and merge with PostNL, and will focus on “other growth opportunities” instead in future.
After PostNL’s rejection of its final €2.55 billion offer yesterday, bpost announced last night that it “has decided not to further pursue a combination between the two companies”. A combined Belgian-Dutch postal group would have been the fourth largest postal operator in the EU by revenue (€5.9 billion) and third by profitability, according to bpost figures.
PostNL turned down the offer mostly on the grounds of complex corporate governance, the influence of the Belgian state and a lack of support from Dutch stakeholders, especially at a political level. The Dutch company declared that it would focus on its ‘standalone’ strategy in the future.
PostNL's share price slumped nearly 13.5% to €4.10 yesterday as investors expressed dissatisfaction with the decision while bpost was up slightly at €21.92.
For its part, bpost stated: “We continue to believe that this combination would present a compelling industrial rationale and constitute an opportunity to accelerate bpost’s and PostNL’s growth strategy, thereby creating substantial value for all their stakeholders.
“When evaluating growth opportunities through mergers & acquisitions, we diligently follow strict criteria in our decision-making process. We now conclude that a combination of both companies cannot be achieved on terms that would meet these criteria.”
Looking ahead, it added: “bpost remains confident in its focused strategy and ability to deliver on its growth ambition. We will continue to carefully explore other opportunities to put our strong balance sheet at work and further accelerate our growth.”
CEO Koen Van Gerven had made clear in mid-November that bpost aims to grow both organically and through acquisitions, regardless of the PostNL offer. “Apart from organic growth, external growth is an important element for the future. Acquisitions will be on the agenda,” he told analysts at a capital markets day. The takeover of Lagardère Travel Retail’s Belgian activities was completed last week.
Under its Vision 2020 strategy, bpost’s key objectives are to increase domestic parcel volumes in Belgium by at least 75% compared to 2015, to double international parcel revenues, and to achieve operating profits (EBITDA) of at least €620 million by 2020, supported by a growing revenue base, stringent cost control and accretive contribution of mergers and acquisitions.
