Regulator blocks PostNL's acquisition of main competitor Sandd

The Dutch authority on consumers and markets ACM is blocking PostNL's planned takeover of Sandd. The takeover would result in a monopoly on the Dutch postal market and that could lead to significant price increases, the regulator said on Thursday. 

If PostNL's only competitor disappears from the market, the prices for business mail sent by, for example, banks and government organizations can increase by 30 to 40 percent, ACM calculated. That will also cause prices for consumer mail to increase faster than without at takeover. And while a merger may lead to increased efficiency because all mail will be delivered through one network, the disadvantages for both companies and consumers outweigh this, ACM said.

"The intended takeover of Sandd by PostNL creates a monopolist in the field of mail delivery. People, companies and governments will therefore pay more for sending mail", ACP chairman Martijn Snoep said to "After careful consideration of the advantages and disadvantages of the acquisition, we therefore came to the conclusion that we cannot grant a license."

PostNL and Sandd disagree with the ACM's opinion and will appeal to the Ministry of Economic Affairs and Climate to still approve the acquisition, PostNL said in a response on Thursday, reports. According to the postal companies, the declining returns and shrinking mail volumes in the Dutch postal market make it impossible to work profitably without merging. "Consolidation is absolutely necessary and the only way to keep the postal services accessible, reliable and affordable for everyone in the Netherlands; from the city to the countryside and for the elderly and socially vulnerable groups", the postal companies said.

State Secretary Mona Keijzer of Economic Affairs previously said that she was positive about the merger, according to NOS. So the companies' appeal on Article 47 of the Competition Act, which gives the Ministry of Economic Affairs the option to make a different choice due to social interests, may work. The government said in a response that it it will study the ACM's decision and will address PostNL and Sandd's request within 12 weeks, the broadcaster writes.