Parcel companies fail to deliver €5bn merger deal
A proposed takeover deal between delivery firms United Parcel Service (UPS) and TNT Express collapsed today.
Atlanta-based UPS ditched its plans to pay €5.2bn for Holland-based TNT as it became clear European regulators would block the move.
TNT has 70 delivery depots, three sorting hubs and three national contact centres in the UK and Ireland, where it employs some 11,000 staff.
While UPS is a major player in the United States, the firm’s operations in the UK are smaller than TNT’s. When the deal was agreed in March, it had 7,200 staff and a head office at Feltham, Middlesex.
UPS had offered to buy struggling TNT, Europe’s second largest delivery company, to better compete with Europe’s largest, Deutsche Post’s DHL. UPS was also after TNT’s assets in Asia and Latin America.
TNT will receive a €200m break fee from UPS, but it faces an uncertain future, with shares plunging nearly 50% at one point in trading in Amsterdam today.
Regulators said in October the deal, which would have been UPS’ largest ever acquisition, would lead to over-concentration in the sector.
UPS offered to sell parts of the company’s small package operations and airline assets but after meeting with regulators, UPS told TNT it saw no prospect of the deal being approved – and it was not interested in further concessions.
The European Commission, which reviews major corporate mergers and acquisitions to ensure they do not hurt fair competition in the market, will publish its review of the deal by February 5.
