The deal, which requires regulatory approval, will increase HDN’s turnover to £600 million ($956 million). It will double its share of the UK market to 17 percent, delivering more than 180 million parcels a year.

The company aims to compete more strongly with market leader Royal Mail, which handles 30 percent of UK parcel deliveries. Royal Mail faces the threat of further industrial action, following strikes before Christmas, as it prepares to resume negotiations over pay and conditions with the Communication Workers Union.

HDN is owned by reclusive businessmen Sir David and Sir Frederick Barclay, who also own Shop Direct. The biggest player in the UK home shopping market, Shop Direct incorporates brands such as Littlewoods, Great Universal and Kays. Through the DHL Domestic acqusition, the brothers are targeting the vibrant online shopping sector, which is estimated to be growing at 15 percent a year.

DHL Domestic handles deferred day-definite rather than same-day and next-day traffic. DHL will keep its UK international, time-definite and same-day express services. Its Servicepoint facilities and DHL’s online offering, DHLitNow, are unaffected.

A DHL spokeswoman would not confirm whether the operation was currently profitable, but Ken Allen, CEO of DHL Express, said: “The agreement allows us to concentrate our resources on further growing the profitable express businesses.”

HDN commented that DHL Domestic had “not been particularly successful”. The company will take on DHL Domestic’s 4,700 employees and facilities by the end of the first quarter and will retain the brand initially, but chief executive Brian Gaunt admitted job losses were likely.

Meanwhile, the International Transport Federation claims that up to 3,500 employees of DHL Domestic Express France could be made redundant following Allen's announcement on Dec. 15 of a proposed sale of the business to Caravelle, an investment fund, for Euro 200 million ($288 million).