PostNL and Sandd to form one strong national postal network for the Netherlands
The transaction assures companies and consumers, the users of physical mail in the Netherlands of a future postal delivery service that remains affordable and accessible, while continuing to meet the high-quality standards expected, including in rural areas and declining regions in the Netherlands. This is also positive news for mail delivery staff of both companies. Consolidation will bring more job security for thousands of mail deliverers and makes it possible to address the declining postal market in a socially responsible manner. PostNL offers to employ all Sandd mail deliverers. Also for all other Sandd employees, opportunities within PostNL or alternatives will be considered. The combination will enable PostNL and Sandd to create a strong basis for a nationwide Dutch postal network across urban and rural areas, safeguarding a sustainable postal service for everyone, including the elderly and socially vulnerable groups.
PostNL and Sandd will today file their intention to combine the networks with the supervisory authority ACM. Under the Competition Act, the ACM has the authority to review those aspects of the transaction in accordance with the competition law. The ACM review comprises two phases, a notification phase and an permitting phase. This approval process has a legal term of, in principle, four weeks for the first phase, and 13 weeks for the second phase, with a possible extension in case the ACM requires further clarifications. In the event that the ACM withholds approval, the parties can apply for approval to the State Secretary of Economic Affairs and Climate Policy. She has the authority to grant approval on the basis of significant public interest. A comprehensive approval process provides clarity and assurance for all employees involved. Both companies have notified their works councils and the trade unions of the proposed transaction. Both works councils are positive about the intended transaction.
At the beginning of 2018, it became clear there was broad political support for consolidation in the postal market in the Netherlands. This was further evidenced by a letter from Mona Keijzer, State Secretary for Economic Affairs and Climate Policy, to the Dutch House of Representatives concerning the future of the postal market in the Netherlands, in response to the so-called “Postal Dialogue” process. In relation to the future of the postal services, it was concluded that consolidation between PostNL and Sandd was the only option to safeguard continuity of the postal services for Dutch society. Combining the volumes of these two networks will generate economies of scale, an important factor in a declining postal market. Consolidation is also the best option for the Netherlands as it facilitates a socially responsible transition to postal service in the future.
Herna Verhagen, CEO PostNL: “This proposed transaction will secure the foundation for a sustainable postal service in the Netherlands. Combining the two national postal networks is of vital importance for the postal market in the Netherlands to remain reliable, affordable, innovative and accessible for everyone. It will also serve increased long-term employment security for mail deliverers. This has always been an important objective of our efforts.”
Ronald van de Laar, managing director Sandd Holding: “I am very proud of what has been achieved by my colleagues following the liberalisation of the postal market. In responding to the ever-decreasing mail volumes in the Netherlands caused by digitalisation, we need to be realistic. For this reason, opting for one strong national postal network is the best long-term solution for the consumer, the business sector and for employees. It is the only solution if we are to guarantee the continuity of the postal service in the Netherlands. Issues affecting the integration of our networks and our employees will also be carefully discussed between us. The sooner we receive the necessary approval, the better it will be for all parties involved.”
The proposed transaction represents an important step for PostNL in realising sustainable value creation in its postal activities in the Netherlands. The main aspects are:
The transaction values Sandd at an enterprise value of €130m and provides for the purchase of all (100%) Sandd shares. The transaction is conditional on approval of the merger of Sandd and PostNL by the relevant authorities, agreement on the final transaction documentation and on consultation with the relevant works councils and trade unions.
In financing the transaction and the ensuing integration costs, PostNL expects to temporarily exceed the leverage ratio target (adjusted net debts/EBITDA) of 2.0x max. In line with its dividend policy, PostNL will not pay dividend during the integration period as long as the leverage ratio exceeds the 2.0x figure. PostNL aims to reduce leverage below the 2.0x target in 12-24 months after approval and to resume paying dividends thereafter. PostNL anticipates the Sandd transaction to be accretive to UCOI in the first year after approval. If the proposed acquisition of Sandd does not complete, PostNL will pay a dividend for 2019 in line with its current policy.
This is a translation of the Dutch press release. In case of any differences between the English and Dutch version, the Dutch version is leading.
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We are PostNL, the mail and logistics solutions provider for all. We have been delivering special moments for over 220 years and aim to be our customers’ favourite deliverer by making it as easy as possible for them to send and receive parcels and letters. We constantly offer new services by combining state-of-the-art logistics, digital applications and the right communications channels. And every day we’re looking to do things even better – from apps to digital stamp codes, to sustainable transport and city logistics. On weekdays, we deliver an average 800,000 parcels and 7 million letters across the Benelux region, and our 38,000 people are right at the heart of society.
PostNL NV is a listed company with revenues of €2.8 billion in 2018, 48% of which derived from e-commerce.