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Monday, April 5, 1999 Published at 15:37 GMT 16:37 UK

Business: The Company File

Global ambitions for Post Office

Mail carriers worldwide are gearing up for more competition

The UK Post Office has confirmed that it is planning a £1.5bn ($2.4bn) shopping spree for overseas companies in a bid to compete with growing international competition.

Moves to liberalise the industry are forcing postal organisations across Europe to consider expanding internationally.

The Post Office, which owns Royal Mail and Parcelforce, said it already had eight firms in mind which it was keen to approach.

A spokeswoman said: "There is a wave of changes currently taking place in the European postal market with acquisitions and mergers.

"Internationally, we foresee a superleague of five or six postal authorities and the British Post Office is determined to be one of them.


The Post Office is viewed as a latecomer to the current spate of consolidation. Germany's Deutsche Post has already taken a stake in courier company DHL, while the Dutch post office has bought rival TNT.

In January, the Post Office spent more than £300m buying German Parcel.

The spokeswoman said this was "the first step, and we are certainly not going to stop there. There are eight active targets on our radar screens."

She confirmed the Post Office was keen to increase its stake in General Parcel, a company connected with German Parcel.

Some consumer groups are expected to criticise the plans, saying the Post Office should invest more in its existing UK postal services and keeping down costs to the public.

Plans depend on government

[ image: Will the PO's letters monopoly continue?]
Will the PO's letters monopoly continue?
Any future expansion will depend largely on a UK Government White Paper which is due to be published soon. It is expected to grant freedom for the operation to be run more like a private company.

Last year, former trade and industry secretary Peter Mandelson proposed allowing the organisation to keep a bigger share of its profits, which normally are returned to the Treasury.

His plans would also have allowed more leeway for buying overseas companies.

In return, the Post Office's monopoly on delivering letters costing less than £1 would be axed, while the sector would be kept in check by a new regulator.

European rivals have accused the UK post office of using income from its letters monopoly to pay for the acquisition of German Parcel.

There is much to be fought over: The global market for letters and packages is worth £20bn a year and increasing steadily. Some analysts forecast that it can reach £57bn a year by 2010.

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