After a long period of speculation over the potential acquisition of U.K.-based third party logistics giant Exel, Deutsche Post World Net, is stepping up the pace. DPWN shareholders are reportedly concerned it would overpay, but adding to the need for speed is a potential bid by UPS.

UPS, which had been rumored to be interested in Exel earlier this year, has a strong cash position and speculation of a bidding war for Exel places UPS as the lead prospect to challenge DPWN. UPS recently acquired Overnite Transportation, but the company has repeatedly asserted it will operate the less-than-truckload operation separately from its package business. As such, the integration is more on a marketing level than an operations level. This could leave the company clear to undertake a major acquisition.

Exel, by contrast, had acquired Tibbett & Britten in 2004 and appeared unlikely to make any major market moves before the integration of those operations was complete. In an announcement earlier in 2005, the company said the integration had been completed.

According to Reuters German mail giant Deutsche Post has reached an agreement in principle to buy UK logistics company Exel and will announce a formal offer soon, a source familiar with the matter said.

Exel, which has over 111,000 employees in 2,000 locations in over 135 countries, claims its customer base includes 75% of the world?s largest publicly traded companies. The firm was recently declared the largest global provider of logistics services by Transport Intelligence. Its European Logistics Leaders 2005 showed the acquisition of Tibbett & Britten last year pushed the company ahead of TNT Logistics as the world?s largest 3PL. DHL Solutions, DPWN?s 3PL operation, ranks fifth in the world, says John Manners-Bell of Transport Intelligence. The fragmentation of the European 3PL market suggests regulators will take little notice of the acquisition. According to Transport Intelligence, a DPWN acquisition of Exel would give it just 12.8% of the European market.

Sources: Logistics Management and Reuters

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