Competition watchdog to investigate Evri merger with DHL’s UK parcel arm
The UK watchdog has launched an investigation into Aviva’s £3.7bn takeover of Direct Line, citing competition concerns.[/caption]
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 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 1bn parcels and 1bn 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.
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Evri and Yodel have consistently been the worst-rated companies for delivery problems, customer service and trust by customers of the five big firms 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.
In a move that could reshape the UK parcel delivery market, the Competition and Markets Authority (CMA) has announced it will investigate the proposed merger between Evri (formerly Hermes UK) and DHL’s UK parcel delivery operations. The deal, which aims to create a more competitive player in a rapidly growing logistics sector, has raised concerns over market dominance and the potential impact on consumers and businesses alike.
The Merger: A Strategic Play
Evri and DHL are two of the UK’s largest parcel delivery companies, serving millions of customers across retail, e-commerce, and individual consumer segments. The proposed merger would see the two companies combine operations to streamline delivery networks, enhance service capabilities, and increase their ability to compete with giants such as Royal Mail, Amazon Logistics, and DPD.
The logistics sector has experienced a surge in demand over the past few years, driven largely by the boom in e-commerce. However, this growth has also led to consolidation, as major players seek economies of scale, improved infrastructure, and broader national reach. The Evri-DHL UK deal is a textbook example of this trend.
But the CMA’s intervention signals that the merger’s implications go far beyond operational efficiency.
CMA Concerns: A Question of Competition
The Competition and Markets Authority, the UK’s top watchdog for antitrust and fair trading, has launched a Phase 1 investigation into the deal. The regulator’s primary concern is whether the merger could substantially lessen competition in the parcel delivery market — particularly in sectors where Evri and DHL already have strong presences.
A CMA spokesperson said the investigation will assess whether the merger could lead to:
Higher prices for parcel delivery services
Reduced service quality or innovation
Fewer choices for businesses and consumers
The regulator is inviting comments from stakeholders, including competitors, customers, and industry experts, as part of the evidence-gathering process. Depending on the findings, the CMA could escalate the case to a Phase 2 investigation, which would involve a more in-depth analysis and could lead to remedies, conditions — or even blocking the deal altogether.
Industry Reaction
Initial industry response has been mixed. Some experts argue the merger is a logical response to the demands of modern logistics, especially as customer expectations around speed, tracking, and flexibility continue to rise. Others warn that fewer competitors in the market could lead to monopolistic behaviour and less incentive to improve service — something many consumers have already complained about in the parcel sector.
Retailers, particularly small and medium-sized e-commerce sellers who rely on affordable parcel delivery, are also watching closely. If the merger leads to price hikes or service degradation, it could directly impact their margins and customer satisfaction.
What Happens Next?
The CMA is expected to conclude its Phase 1 investigation in the coming months. If concerns are confirmed, it could trigger a full Phase 2 probe, delaying the merger and potentially reshaping its terms. Both Evri and DHL have expressed confidence in the deal, stating their belief that it will enhance competition rather than harm it.
Until the CMA delivers its findings, the future of the merger hangs in the balance. What is clear, however, is that the outcome will set a precedent for future consolidations in the UK’s logistics and delivery sector — and will be closely monitored by industry players and policymakers alike.