UK watchdog to investigate merger of Evri with DHL’s UK parcel arm

The UK’s competition watchdog has announced an investigation into the proposed merger of the delivery company Evri with DHL’s UK e-commerce business, a deal set to create one of the biggest parcel couriers in Britain.

The Competition and Markets Authority (CMA) said on Wednesday that it was investigating Evri’s purchase of DHL eCommerce UK, as well as the parent company DHL Group’s acquisition of a minority stake in Evri.

The UK is the world’s third largest market for online commerce, behind only the US and China, according to US government figures. That enormous demand has prompted a scramble by delivery companies to meet it.

The CMA said it would decide whether the Evri deal will result in a substantial lessening of competition. It said it would gather comments from interested parties for two weeks, until the 25 June, before starting the first phase of its investigation.

The merger could bring together more than 30,000 couriers and van drivers, and 12,000 further workers. The combined company would deliver more than 1 billion parcels and 1 billion letters each year, the companies said.

Germany’s DHL is the world’s third biggest delivery company by market value, behind only the US’s United Parcel Service and FedEx. DHL owns Deutsche Post, Germany’s privatised postal service.

Evri was bought last year for £2.7bn by Apollo Capital Management, a US private equity company, from Advent International, another US private equity firm. It was rebranded in 2022 from Hermes, after starting out as part of the German mail order group Otto. DHL Group will acquire a “significant minority stake” in Evri as part of the merger.

Other delivery companies are racing to win market share in parcels. The Czech billionaire Daniel Křetínský’s EP Group won approval in December for the takeover of Royal Mail, with a plan to push further into parcels to make up for the decline in letters. The Polish parcel locker company InPost agreed a deal to take over the British delivery firm Yodel for £106m in April, although it is on hold pending legal action.

Delivery companies have struggled to retain customer trust through the boom in online shopping, with polling regularly pointing to people experiencing delivery problems.

Evri and its rival Yodel have consistently been the worst-rated companies for delivery problems, customer service, and trust by customers of the five big companies tracked by Citizens Advice in annual polling.

Royal Mail and the US online retail company Amazon were the best rated overall by customers, with the French-owned DPD in the middle. DHL was not tracked in the polling.