Deutsche Post to buy logistics firm Hillebrand for $1.8 billion

Deutsche Post AG has agreed to acquire German logistics company Hillebrand for about 1.5 billion euros ($1.8 billion).

The deal will boost Deutsche Post’s position in the ocean freight forwarding market, the company said in a statement Tuesday. It marks Deutsche Post’s biggest purchase since its 2005 acquisition of U.K. freight group Exel Plc for about $7 billion.

Hillebrand, which traces its roots back more than 175 years as a transporter of wine barrels, provides logistics services for the transportation of beverages and bulk liquids. It employs about 2,700 staff globally and generates annual revenue of 1.4 billion euros, according to its website.

Bloomberg News reported earlier this month that Deutsche Post was in discussions with Hillebrand’s private equity owner Cobepa about a deal. Cobepa bought the company in 2006.

Deutsche Post, which owns the DHL express-package and freight brand, has pledged investment in core logistics businesses under its Strategy 2025 growth plan. The mail operator will fund its purchase of Hillebrand with available cash, according to the statement. The acquisition is expected to be immediately accretive to earnings and cash flow.

“Using our financial strength, we are able to pursue quality investments,” Frank Appel, Deutsche Post’s chief executive officer, said in the statement. “With the growing maturity of our freight forwarding business, this bolt-on acquisition of Hillebrand is highly complementary to our existing portfolio.”