The Belgian post (bpost) had offered to buy the Dutch post (PostNL). Although CEO Van Gerven declared on May 30th that the negotiations would stop, one may wonder what triggered Bpost offer and what potential consequences for employees could have been.
In this article we go through the 4 steps that have changed bpost history. Under step 4 we explain the reasons behind the possible acquisition of Post.nl by bpost (a detailed article was published 2 days ago).
Step 1: Bpost went on the stock market
The first episode of this saga began on 21 June 2013 when bpost got on the stock market. At that time it was second biggest IPO of the year.
Its CEO at the time, Johnny Thijs, had transformed the company in a little bit more than 10 years from almost bankrupt to highly profitable. Profits had kept increasing and at the time of the introduction, the Belgian State committed to keeping a majority stake (51.01%) for a period of 2 years after the introduction.
Step 2: Make bpost a finance-driven company
A very important moment in the recent history of bpost is Johnny Thijs’ resignation. After Minister Labille fought to set limits to public organizations’ CEOs’ pays, Thijs decided to leave.
Soon thereafter top executives were fired (including Bpost International’s Peter Somers) which shacked the whole organization. From there onward, bpost became a financially-driven organization and slowly lost its organizational focus.
Step 3: Make sure the State gets the best out of its shares
Bpost stock price has risen almost 70% (from 15€ to 25€ today) since its introduction. This performance was obtained through very aggressive cost cuttings, including a decrease of the workforce. This strategy was obviously set to get the best out of the organization and increase profitability as much as possible. The hidden goal behind this strategy was to allow the State the get the best price out of its shares.
Step 4: Ensure bright perspectives for shareholders
The postal market is rapidly declining; people don’t send letters and postcards anymore. However they receive more and more parcels as a consequence of the growth in e-commerce. The parcel segment is very competitive: local players compete with worldwide delivery firms (DHL/Deutsche Post, Fedex/TNT) and even postal companies compete with each other. In this context, how can bpost ensure shareholders ever increasing returns? That’s where Post.nl comes into the game.
In a separate article we have explained in detail the four reasons behind the acquisition of Post.nl :
- Elimination of Bpost’s biggest competitor
- Gain in bargaining power to negotiate better (and cheaper) deals with transport companies (by air and by road)
- Acquisition of the largest distribution network in The Netherlands
- Economies of scale in outbound and inbound flows
Conclusion
When put back into an historical context, one can see that bpost has been turned by Johnny Thijs into an efficient cash machine. After he resigned the focus was put by Bpost CFO on returns and dividends, driving bpost away from a operational logic to a purely finance-driven company.
The acquisition of Post.nl is nothing more that a step forward into securing further growth and even more dividends for shareholders. Unfortunately this can’t be made without further “rationalization” measures, without more layoffs. Ironically the Belgian State will probably lose in the game : it will earn a lot through the sale of its shares, but at the same time the financial madness of bpost has created jobless people which the State will have to care for.
Photo : Jarretera / Shutterstock.com
Posted in Marketing.
