bpost is rebuffed by the Dutch


The Belgian Post Office, ‘bpost’, has publicly outlined its wish to buy or merge with PostNL in a letter sent to the Dutch mail provider on Monday (November 7, 2016). The move is part of a gradual trend of consolidation in the mail sector as the market changes, driven by the shift towards e-commerce.

bpost has offered a mix of shares and cash worth €2.5bn for PostNL and received support of its government in doing so. The Belgian Government is a majority shareholder in what used to be the state mail monopoly. bpost has been having discussions with PostNL for several weeks, however these were leaked in the press and the Belgians were forced to go public.

The logic behind the move is an attempt to gain economies of scale, with bpost claiming that any merged entity would “serve 28m potential customers” and create a leading “mail, parcels and logistics provider”.

The Government of the Netherlands is apparently not so keen. It wants to see PostNL floated on the stock market in Amsterdam. The Dutch mail provider stated that it was “unpleasantly surprised by the rumours in the media….and can confirm that we are not in discussions with bpost”. PostNL management continued, asserting that “we have confidence in our stand-alone strategy”.

Both company’s performance is reflecting the underlying trends in the market. bpost third quarter numbers (released November 9, 2016) saw revenues falling by 2.3% on lower mail volumes but parcel volumes were up by 12.7%. PostNL saw its revenues edge down by just over 1% with mail volumes down by 6%, but parcel volumes up by 12%.

The former mail monopolies are facing increasing pressure as the long-standing decline in mail parallels the growing demand for parcel services. Most former mail monopolies have large parcel operations at a local level but often lack the economies of scale at international levels to offer a coherent service to e-retailers. They need size and access to capital, raising the prospect of mergers and take-overs. However, breaking down national barriers to let this happen is likely to be difficult.

Source: Transport Intelligence, November 10, 2016

Author: Thomas Cullen