Affected market: Postal delivery
The OFT's decision on reference under section 33 given on 11 July 2003
Deutsche Post AG (DPAG) is primarily involved in providing the national
postal service in Germany under an exclusive licence. In the UK DPAG is
active through DHL Holdings (UK) Ltd (DHL), Securicor Omega Holdings Ltd
(SOH) and Danzas Ltd.
Airborne Inc (Airborne) is an express delivery and freight company based
in the US. In the UK Airborne is active in London, Birmingham, Bristol
and Glasgow. Airborne's UK turnover in 2002 was £7.5 million.
DPAG proposes to acquire Airborne. The date of notification was 6 June
2003 and the 40 day administrative deadline is 1 August 2003.
As a result of this transaction DPAG and Airborne will cease to be
distinct. The parties overlap in the supply of international services
consisting of express delivery; express freight; and freight
forwarding. The share of supply test in section 23 of the Act is met for
international express delivery services. A relevant merger situation
has been created.
The EC has examined these services in several cases, including DPAG's
recent move from joint to sole control of SOH, DPAG/DHL (COMP/M.2908),
DPAG/Air Express (COMP/M.1794) and DPAG/Securicor (COMP/M.3155).
The EC considered international express delivery of parcels to differ
from standard delivery by the quality and reliability of the service
provided. This type of service often includes guaranteed delivery
dates, proof of delivery and the possibility to track a package whilst
The EC considered international express freight to differ from
international express delivery by size and weight of products
transported and the time taken to deliver the goods.
International freight forwarding is the standardised transport of heavy
items by road, sea and air as necessary.
Given the lack of competition concerns arising in this case, it has not
been necessary to reach a conclusion on product market definition.
The EC has previously considered services such as these to have a
national geographic dimension. This was considered appropriate due to
the varying regulatory environments and the need for some local
presence. In this case, due to the lack of competition concerns, it has
not been necessary to reach a conclusion on the relevant geographic
For the above product sectors, the level of overlap between the parties
within the UK is minimal, with (in 2001) DHL accounting for
approximately [30-40] per cent [see [note 1]] of
international express delivery services and Airborne adding an increment
of less than one per cent. There are numerous alternative suppliers of
these products for customers in the UK.
No significant vertical issues arise as a result of this transaction.
This transaction gives rise to a small increment in the supply in the UK
of international services consisting of express delivery; express
freight; and freight forwarding. This small increase is unlikely to
have any significant effect on the parties' ability to act
independently of their competitors. The existence of numerous large
international and national firms that also provide these services is
likely to represent a sufficient constraint in preventing
anti-competitive effects arising from this transaction. The merger does
not appear to result in a substantial lessening of competition within a
market or markets in the United Kingdom for goods or services.
This merger will therefore not be referred to the Competition Commission
under section 33(1) of the Act.
1. Actual figures replaced by a range at the request of DPAG.