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Deutsche Post AG is throwing in the towel, and possibly giving up on the U.S. market, if speculation in the Financial Times is true that it's preparing to sell its DHL unit to FedEx Corp. One result of such a deal is that DP could end up with a stake in FedEx. Such a deal might also inflame concerns about foreign ownership of U.S. assets, particularly since that's a charge FedEx hurled at DP just a few years ago.
In 2002 Deutsche Post, the world's largest logistics group, made a splash when it bought the 23% of DHL it didn't already own for 400 million euros ($587 million). To play catch up -- DHL is the third-largest U.S. parcel delivery service -- DP acquired Airborne Express in 2003 for $1 billion. In response, rivals FedEx and United Parcel Service Inc. filed complaints over foreign ownership of U.S. airlines -- DP was subsidized by German government -- leading to a protracted regulatory review and congressional hearings. While the deal was mired in politics, DHL's rivals expanded into retail. UPS bought Mailboxes Etc. to create the UPS Store chain, and FedEx snagged printing chain Kinko's from buyout firm Clayton Dubilier & Rice Inc., remaining ahead of their German rival. And in the end, DP was able to acquire Airborne. Now, if this deal ever materializes, don't be surprised if UPS clubs FedEx with its own foreign ownership charge. - Matthew Wurtzel See story from the Financial Times Categories Deal Video
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