FedEx, TNT Receive Unconditional European Approval for Merger Plan
FedEx Corp. and Dutch freight and package operator TNT Express announced that the European Commission has decided that their combination doesn’t raise any competitive concerns and has given unconditional approval to the companies’ $4.9 billion merger, moving the plan a step closer to completion.
The announcement follows the European regulator’s decision three months ago that it wouldn’t block the combination that FedEx pursued to broaden its presence in European and Asian markets. In the interim, the agency that two years ago rejected UPS Inc.’s bid to buy TNT was completing a review to determine whether there should be merger conditions, such as divestitures.
Commissioner Margrethe Vestager, in charge of competition policy, commented: "Many businesses and consumers rely heavily on affordable and reliable small package delivery services, in particular with the growth of e-commerce. Therefore, the Commission has thoroughly assessed the markets affected by this takeover. The conclusion is that European consumers will not be adversely affected by the transaction."
FedEx and TNT, which still need approvals from China and Brazil, continue to target a completion of the deal in the first half of this year, maintaining that their combination will increase competition worldwide.
FedEx, which is the fourth-largest package operator in Europe, made its acquisition proposal in April to create a combined presence in Europe that is similar in size to UPS on that continent. EC regulators turned down UPS’ bid for TNT because of a perceived reduction in competition as a result of combining the second- and third-largest package companies behind DHL Express.
“We are extremely pleased to receive the European Commission’s unconditional approval,” said David Binks, regional president, Europe, for FedEx Express. “We believe the combination of TNT Express and FedEx will provide significant value to the employees, customers and shareholders of both companies.”
It’s not known whether any competitors to FedEx and TNT had been seeking conditions, such as asset sales or broader market access, because the EC doesn’t disclose whether any such requests were made.
Before the latest EC action, steps such as TNT shareholder approval moved the plan forward.
The Jan. 8 statement said “FedEx and TNT Express are making timely progress” on the other necessary approvals.
UPS is No. 1 and FedEx is No. 2 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
