New Nordic Postal Co. Created

Sweden's Posten and Post Danmark, which has CVC Capital Partners as a shareholder, are combining to create a more competitive company.

The Swedish Ministry of Enterprise, Energy & Communications, the Danish Ministry of Transport and CVC Capital Partners said on Tuesday that they have signed a letter of intent to merge Posten with Post Danmark.

In July 2005, CVC bought a 22% stake in Post Danmark from the Danish state.

The agreement envisages the merger of Posten and Post Danmark through the creation of a new SEK 45bn (US$7.5bn) parent company (as measured by revenues), with 50,000 employees.

The new company will be 60%-owned by the Swedish state and Posten's employees, with the remaining 40% controlled by the Danish state, CVC and Post Danmark's employees.

Sweden's voting rights will, however, be equal to those of the Danish state together with CVC.

“The rationale for the merger is to create a strong and more competitive new company able to meet the increasing challenges in the postal market,” CVC said in a statement.

Fritz Schur, currently Post Danmark's chairman is set to become the chairman of the new company, while Erik Olsson, who is Posten's chief executive, will take on that role in the newly merged Nordic postal operator, which will be headquarterd in Stockholm, Sweden.

As part of the agreement, Posten will distribute an extraordinary dividend of SEK 1,400m (