After more than two years of talks over the acquisition of Cargus, DHL Romania will begin to make joint decisions on behalf of both companies as of next year and become the undisputed leader on the domestic market. In addition, the company will enter the top three countries in the region in 2009.
"Romania has the highest growth rate of all the countries in Europe as far as DHL is concerned. In terms of value, Romania ranks fourth after Poland, Czech Republic and Hungary and as soon as the Cargus acquisition has been completed next year we will move to number three," said Gian Sharp, country manager of DHL Romania, in his first interview since the announcement of the Cargus takeover, in a deal signed in April.
According to estimates, DHL and Cargus will operate an over 80 million-euro business together, double the business volume of the players behind them (Fan Courier and TNT), based on the budgets announced by the companies at the beginning of the year.
The decision to buy Cargus came as a result of the dynamics of the domestic courier service sector, where local firms are well grounded. "We decided to buy a domestic courier company three years ago, because domestic courier services are seeing a very fast growth rate, leaving international courier services behind in this respect. Had we entered with a greenfield investment, it would have been harder to catch up with companies that are already at a certain level," Sharp said. Cargus was the only company with which DHL held negotiations, whilst other negotiations were halted after the discussion stage with the other companies considered. When they decided to buy, the people at DHL were certain the deal would come through. "There were bad times and good times, but we were certain we wanted to buy the company," Sharp said. DHL received advice for this deal from McGregors & Partenerii and Linklaters, while PricewaterhouseCoopers served as auditors.
On the other hand, Cargus had a gentlemen's agreement with the owners, negotiating the sale exclusively with DHL. Cargus, one of the leading domestic courier companies was worth 50 million euros at the time of the deal, according to sources on the market, a value its officials did not confirm. The sale-purchase contract included a number of conditions such as dropping Cargus' partnership with GeoPost and keeping the Cargus brand. As Sharp explained, working out the final details was actually the most difficult moment of the negotiations.
"The toughest point of the negotiations was the final part, when all details were worked out and our lawyers negotiated for thirty hours on end," the DHL Romania manager said.
The two companies are now awaiting the approval of the Competition Council and have already set their first joint budget - an increase of 30% in 2009. In addition, management consultant Baron & Associates has been hired to help integrate Cargus.
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