TNT Holders Back FedEx Acquisition
Shareholders of TNT N.V., the Dutch carrier that agreed to a $4.9 billion acquisition by FedEx Corp., backed the terms of the deal, which the buyer said will increase package and freight competition.
The announcement by FedEx, which ranks No. 2 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, noted that TNT shareholders, at an extraordinary general meeting, approved a provision to close the deal if 80% of shares were tendered. A tender offer is scheduled to end Oct. 30.
The European Commission is reviewing terms of the deal and hasn’t yet said what changes or divestitures might be required.
Separately, TNT said third-quarter results worsened. Its adjusted operating income in the quarter was “materially lower” than the same period of last year. That figure, excluding interest, taxes and one-time charges was 50 million euros (about $55 million) in the 2014 period.
“We appreciate that the shareholders of TNT Express approved the resolutions of TNT Express’ Extraordinary General Meeting,” said David Binks, FedEx Express' regional president for Europe. “We believe the combination of these two great companies will provide significant value to the employees, customers and shareowners of both TNT Express and FedEx. We continue to work constructively with the regulatory authorities around the world to obtain clearance of the acquisition.”
FedEx has said it intends to complete the acquisition early next year. Its offer was 8 euros per share for TNT, which is based in Hoofddorp, Netherlands. On Oct. 5, shares were trading about 20% below the offer price, after the seller’s profit warning.
“The combination presents a highly pro-competitive proposition for the provision of small-package delivery services within and outside Europe,” the statement said. “The networks of TNT Express and FedEx are largely complementary, given that FedEx’s strength is providing U.S. domestic and extra-EEA international services, while TNT Express’ focus is on providing intra-European services.”
The statement also noted that Chinese and Brazilian regulators have to approve the plan, which could affect the time period for accepting shares.
In Europe, FedEx has said it plans to jettison TNT Airways, which has 50 planes, and move packages and freight in the buyer’s fleet that numbers about 600 aircraft.
The statement regarding third-quarter results said, “Economic volatility in Brazil, China and Australia weighed on TNT’s performance in these parts of the world. In its Domestics segment, TNT faced competitive pressures in Australia, compounded by the drop in commodity markets and the ongoing costs of modernizing the company’s Australian infrastructure.”
Margins also worsened in France, and costs rose for updating the company’s operations.
