Springer, TNT in German mail deal talks

Publisher Axel Springer AG is in talks with Dutch mail and parcel group TNT about merging German mail services companies TNT Post and PIN Group, a person familiar with the matter said. The idea is to create a company that can challenge German market leader Deutsche Post once its domestic monopoly on letter deliveries ends at the start of next year.
"The companies are talking about which strategic options they could take, and merging the number two and three in Germany is the most likely option," the person told Reuters on Thursday. Springer, Europe's largest newspaper publisher, and TNT declined to comment.
Germany is due to abolish Deutsche Post's letters monopoly and open the lucrative market to competitors. Springer, publisher of Europe's best-selling daily Bild, bought a majority stake in PIN Group for 510 million euros ($735.7 million) in June, upping its share to 63.7 percent from 23.5 percent.
TNT, the number two in Germany's letter market, already owns 25.1 percent of German mail delivery firm ecoflash Briefservice GmbH. The Dutch firm is seeking to compensate for shrinking mail volumes at home by growing abroad, particularly in Britain and Germany. It expects to benefit from European Commission plans to liberalise the European mail market by 2011.
The person familiar with the matter said it was not yet clear how large a PIN stake Springer would divest, but that the Berlin-based publisher would not go beneath its original stake in PIN Group. "There will be some definitive progress by the end of the year," the person said.
"The idea is to tap into the letter market business because it offers direct customer contact which is especially interesting in light of the booming mail-order business," the person said. "It would also make Springer more independent from other logistic operations," the person said, with regard to delivery of subscription newspapers and magazines.
Deutsche Post and Springer have been at loggerheads since the dominant German mail company cancelled advertising worth around 800,000 euros in Springer's magazines and newspapers. Springer called the move a punishment for media companies entering the postal delivery market.
Deutsche Post, Europe's largest mail carrier, pulled the ads in reaction to a campaign by Springer to oppose the launch of a minimum wage in the postal sector, which it says would put Deutsche Post's future rivals at a disadvantage.