Otto Group fully reacquires Hermes Germany – Advent sells 25 percent stake – Image: Xpert.Digital
No more in-house drivers? Hermes in crisis – now the Otto Group is taking action.
A loss of €231 million: The bitter truth behind the emergency buyback of Hermes
The Hamburg-based retail and services group Otto Group is reacquiring full ownership of the parcel delivery service Hermes Germany. After a partnership of just five years, the financial investor Advent International is selling its 25 percent stake back to the parent company. This strategic move, however, is not coming from a position of strength, but rather amidst a deep economic crisis at Hermes. With an alarming annual loss of €231 million and a book value written down to zero, the logistics company is fighting for survival, plagued by declining parcel volumes and ruinous competition.
In response, a drastic restructuring program has already been initiated, which not only includes the elimination of up to 850 jobs but also a radical change in strategy: Hermes will completely outsource parcel delivery to subcontractors and no longer employ its own drivers – a move sharply criticized by unions. Contrary to all rumors of a sale, the Otto Group's repurchase makes it clear that it intends to take charge of the restructuring itself and maintain Hermes as an essential component of its e-commerce business.
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After mega losses: Otto Group takes over Hermes again completely – here's the story behind it
The Otto Group will once again become the sole owner of parcel delivery service Hermes Germany. Financial investor Advent International is selling its 25 percent minority stake back to the Hamburg-based retail and services group. The corresponding agreement was concluded at the beginning of November 2025, and the transaction is expected to be completed before the end of the year. Financial details of the buyback agreement have not been disclosed.
Background of the strategic partnership
The collaboration between Advent and the Otto Group began in 2020. At that time, Advent International acquired a 25 percent stake in Hermes Germany and a 75 percent stake in Hermes UK (later renamed Evri). According to media reports at the time, the purchase price for the entire transaction was approximately €1 billion. The aim of the partnership was to support Hermes in its digital transformation and the expansion of its logistics capacities, and to provide the company with further financial flexibility for investments in the highly competitive parcel delivery business.
Ranjan Sen, Managing Partner at Advent, explained at the end of the partnership: “Together, we supported Hermes Germany during an important phase of its development.” Kay Schiebur, Member of the Executive Board of the Otto Group responsible for Services, emphasized: “Thanks to the highly trusting partnership with Advent, Hermes Germany has been successfully developed over the past five years. We are confident that we can now implement the next important steps independently and with a clear focus.”
Hermes Germany's dramatic economic situation
The buyback is taking place against the backdrop of significant economic difficulties. In the 2024/2025 financial year (ending in February 2025), Hermes Germany recorded a net loss, including depreciation, of €231 million on revenues of €1.6 billion. The previous year's loss had been €63 million. The book value of the investment within the Otto Group was set to zero.
The main reason for the losses is considered to be declining parcel volumes. A rule of thumb in the delivery industry is that ten percent fewer parcels mean a 50 percent drop in pre-tax profit with the same network infrastructure. Added to this are rising energy costs and intense competition among the five major German parcel delivery companies – Deutsche Post/DHL, DPD, GLS, UPS, and Hermes.
The Otto Group's annual report also warns: "Significant risks remain in the Services segment, particularly in logistics." It states that "there is a risk that the Otto Group will have to initiate new turnaround processes or closures."
Full Potential Program with massive job cuts
In response to the crisis, Hermes Germany announced a comprehensive restructuring program in April 2025, the so-called Full Potential Program. This program will result in the elimination of up to 850 jobs – equally in both the commercial and industrial sectors. According to the Verdi trade union, 700 jobs have already been cut.
Particularly significant: Hermes is completely abandoning its own delivery operations and outsourcing them to subcontractors. At the end of 2024, the parcel service provider employed around 5,500 of its own staff, while approximately 10,000 to 10,500 delivery drivers worked for external companies. In the future, deliveries will be handled entirely by external drivers. Service routes for supplying parcel shops will also no longer be carried out by Hermes' own drivers, but outsourced.
The Verdi union strongly criticizes this move: "We consider this approach fundamentally wrong and remain convinced that a company with its own delivery service and a strong market presence has a better chance of sustainable success." At the same time, Verdi warns: "The pressure on the remaining colleagues will increase. If the same or better results are to be achieved with fewer staff, this is inevitable."
No intention to sell – focus on internal restructuring
In the weeks leading up to the announced buyback, speculation arose about a possible sale of Hermes Germany to foreign investors. However, CEO Petra Scharner-Wolff clarified in October 2025: "We have no intention of selling Hermes Germany." Instead, the Otto Group plans to fully reacquire the logistics provider and implement its own restructuring: "We will repurchase this stake in the near future and implement our own restructuring."
The Otto Group considers Hermes an essential component of its digital infrastructure and sees stable logistics as a prerequisite for sustainable growth in e-commerce. Kay Schiebur explained: “Thanks to the highly trusting partnership with Advent, Hermes Germany has been successfully developed over the past five years. We are confident that we can now implement the next important steps independently and in a targeted manner.”
Advent has already withdrawn from the British market.
Advent's exit from Hermes Germany comes a year after the investor had already withdrawn from the UK business. In 2024, Advent sold its majority stake in Evri (formerly Hermes UK) to the US investor Apollo Capital Management. Shortly thereafter, in May 2025, Evri and DHL eCommerce UK announced a strategic merger. The UK's Competition and Markets Authority (CMA) unconditionally approved the merger in September 2025, as did the European Commission. The merged company delivers over 1 billion parcels and over 1 billion business letters annually.
With the now-approved sale of the German shares, the strategic partnership between Advent and the Otto Group, which has existed since 2020, finally comes to an end.
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