Since the beginning of the year, speculation surrounding the future of DHL International GmbH
has bubbled up as parent Deutsch Post AG enters a period of restructuring. First the rumor was a deal with FedEx Corp., and now speculation centers around United Parcel Service Inc.
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In the case of the FedEx rumor, first reported by the Financial Times in January, Deutsche Post was expected to receive a stake in FedEx. However, the deal never arrived, and instead -- for the time being at least -- DHL has entered into a service agreement with rival UPS where the Atlanta-based parcel company would handle the air transport of DHL packages for the next 10 years.
It's possible discussion of the transport agreement was an impetus for the January rumors. Alternatively, it's possible that sale talks broke down over financing, regulatory, antitrust or any number of other reasons. Certainly foreign ownership issues could have given FedEx or UPS pause. While both argued in 2002 and 2003 against Deutsche Post's acquisition of DHL and Airborne Express -- obviously to no avail -- the Committee on Foreign Investment in the U.S. has shifted toward a more hardline attitude since then. Consequently, any deal that gave DP a stake in a U.S. delivery service might have scuttled a deal for fear of a CFIUS review.
Regardless of the CFIUS issues, a deal between FedEx and DP no longer looks likely. Instead, if DP does say "auf Wiedersehen" to DHL, it looks like UPS will be saying "hello." - Matthew Wurtzel
