FedEx, TNT say no EU antitrust objections to $ 5 b merger

Monday, 26 October 2015 00:00 -     - {{hitsCtrl.values.hits}}

EU antitrust regulators have no objections to FedEx’s 4.4 billion euro ($ 5 billion) acquisition of Dutch peer TNT Express, the companies said last week, confirming what two people familiar with the matter previously told Reuters.

With a European market share of 17%, the combined company would be Europe’s second-biggest delivery services business, behind Deutsche Post’s DHL but ahead of UPS. The deal would also strengthen FedEx’s position as the world’s No.3 player.

TNT shares jumped 10% to 7.55 euros, the biggest gainers in the STOXX Europe 600 Industrial Goods and Services index, after Reuters cited sources saying unconditional EU approval was imminent.

It was the biggest rise in the stock since April, when the takeover was announced. Shares in PostNL, which owns just under 15% of TNT Express according to Thomson Reuters data, rose 8.3%.

“FedEx and TNT have been informed by the European Commission that no statement of objections will be issued,” the companies said in a joint statement. “FedEx and TNT continue to expect that the offer will close in the first half of ... 2016.”

Prospects for a reduction in the number of European players from four to three had triggered a full-scale investigation by the European Commission on 31 July, because of concern that the deal could reduce competition and result in higher prices.

The EU antitrust enforcer subsequently made a price analysis to help it decide whether to send a so-called statement of objections or charge sheet listing problematic issues to FedEx.

Such moves usually ratchet up the pressure on companies to offer concessions unless they can convince regulators otherwise. A decision not to send a charge sheet usually means regulators do not see serious competition issues.

Commission spokesman Ricardo Cardoso declined comment. The EU executive is scheduled to announce its decision by 13 January.

UPS had sought to buy TNT in 2012, but the bid was scuppered by the Commission because the combined company would have controlled more than 30% of the European market. UPS has challenged the Commission’s decision and has been lobbying against the proposed FedEx deal.