Deutsche Post set for £12bn European flotation

Private UK investors will be offered shares in Europe's biggest post office when the German government launches the £12bn flotation of the state-owned Deutsche Post next month.

Private UK investors will be offered shares in Europe's biggest post office when the German government launches the £12bn flotation of the state-owned Deutsche Post next month.

Between a quarter and a third of the German postal monopoly is being sold off and retail offers will take place in seven European countries including Germany and the UK.

The privatisation of Deutsche Post will put further pressure on the UK's Post Office, already facing increased competition from overseas. The Post Office last year bought German Parcel, the third biggest private postal business in Germany, for £300m, and yesterday it paid £30m for a 49 per cent stake in the Italian express parcel business Direzione Gruppo Executive.

The retail offer for Deutsche Post will be launched on 30 October and the shares are due to start trading on the Frankfurt Stock Exchange on 20 November. The initial share sale is expected to raise at least £3bn, making it one of Europe's largest privatisations. A further tranche of shares could be sold off as early as 2001.

Deutsche Post already owns Securicor Omega, the UK parcels service, and has a controlling 51 per cent interest in DHL, and a flotation is likely to signal further aggressive expansion into overseas markets. It is already Europe's largest parcels company. The chief financial officer, Edgar Ernst, said that Deutsche Post could raise "several billions" of euros through the sale of non-core assets to fund acquisitions.

The group yesterday posted a 141 per cent rise in first-half profits before interest, tax, depreciation and amortisation to 1.4bn euros (£840m) on sales up by 58 per cent to 15.7bn euros. The increase in profits was driven by acquisitions.