DHL Allowed to Take over KarstadtQuelle Logistics Operations

German government approves deal as carrier assumes control of department store's large, part-load work

German government approves deal as carrier assumes control of department store's large, part-load work

Bonn — June 17, 2005 — The German government has approved DHL's takeover of the distribution logistics for the large and part-load operations of KarstadtQuelle AG, which the two partners planned in January and which is scheduled to take effect on July 1.

DHL, a fully owned subsidiary of Deutsche Post AG, has already acquired the distribution logistics operations for Karstadt department stores at the goods distribution center in Unna, effective April 1.

With Germany's Federal Cartel Office approving the latest takeover, Frank Appel, the board member in charge of logistics at Deutsche Post World Net, said that this move would substantially strengthen DHL's contract logistics operations. "We can now push ahead with the integration of both logistics operations into our structures," Appel said.

"This cooperation will yield tangible financial and qualitative benefits for both companies," said Harald Pinger, finance director and head of the mail-order division at KarstadtQuelle. "For our part, we will profit from the experience of a professional and modern logistics partner. At the same time, we are happy about the successful conclusion of another chapter in our divestment program."

The proceeds from the sale will go to KarstadtQuelle AG once the logistics operations are transferred.

The department store logistics and large and part-load operations for the two mail-order groups Quelle and Neckermann, which DHL Solutions will handle in the future, represent a combined sales volume of about 500 million euros, or about $609 million. Under the 10-year contract, this amounts to a total volume of 5 billion euros.

With annual revenues over $32 billion in 2004, DHL stakes a claim as the global market leader in the international express and logistics industry. Founded in San Francisco in 1969, the company now has 170,000 employees operating a network in more than 220 countries and territories worldwide.

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