Subscribe to our free, weekly email newsletter!


Report: EU extends time period for review of UPS’s acquisition of TNT Express

By Jeff Berman, Group News Editor
July 31, 2012

A recent Bloomberg report stated that European Union (EU) regulators have extended their review of UPS’s bid to acquire Netherlands-based TNT NV, a provider of mail and courier services and the fourth largest global parcel operator for $6.28 billion by ten working days until December 12.

According to the report, the EU did not specify the reason for the delay which was signaled in an online filing on July 27. It added that the time limit for regulatory review of deals can be prolonged at the request of companies.

On June 22, UPS commenced an offer period for the acquisition that was slated to run through August 31. But in mid-July UPS said that the European Commission’s review of the proposed acquisition is now expected to move to a “Phase II review,” because there are facets of the deal that require more time to analyze.

UPS officials said a Phase II investigation can take up to 25 weeks to complete, adding that it is likely the offer condition relating to competition clearance will not be satisfied by the end of the initial offer period. Because of this, the company said it now expects the deal to be completed during the fourth quarter of this year.

UPS and TNT said that this “transaction will create a global leader in the logistics industry with more than $60 billion in annual revenues and an enhanced, integrated global network.”

As previously reported, the joint synergies expected to result from this deal, according to UPS and TNT include:
-the complementary strengths of both organizations creating a customer-focused global platform that will be a leader in transportation technology and customer service;
-TNT Express customers benefiting from UPS’s unparalleled access to the North American market as well as access to its logistics solutions, such as global freight forwarding and distribution capabilities; and
-UPS customers will benefit from access to expanded express and road freight capabilities in Europe and broader capabilities in fast-growing regions such as Asia-Pacific and Latin America.

“We intend to leverage the strengths of both companies to enhance the combined growth portfolio and believe all stakeholders will benefit,” said UPS Chairman and CEO Scott Davis on an investor call in March. “UPS possesses a large U.S. presence, as well as experience in global supply chain management. TNT Express provides additional small package access points in Europe, the most extensive European express road network, and an expanding presence in emerging markets.”

Over the years, TNT has grown into a highly respected $7.25 billion euro company with diverse revenue streams from around the world with operations in more than 200 countries in Europe, the Middle East, Asia Pacific and Latin America, said UPS CFO Kurt Kuehn on the March investor call. And he added TNT has a substantial group of assets, including aircraft, vehicles, hubs, and depots, which cumulatively account for about 1 million deliveries per day handled by its 77,000 employees. IN 2011, TNT had a net loss of $270 million euro and $7.2 billion euro in revenue.

And according to UPS estimates about 23 percent of TNT Express’s Europe revenues are from its express road freight operations, which Kuehn described as an important and vital part of its business and a real differentiator.

TNT’s second quarter earnings were strong, with the company posting a 67 percent annual increase in operating profit to $94.7 million (U.S.) and sales up 1.7 percent to $2.25 billion.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Over $2 billion dollars in carrier overcharges go uncollected each year as shippers do not have the time or resources to collect refunds.

Last year at this time, retailers were relieved to learn that a tentative agreement on a new labor contract had been reached by dockside labor and management on the U.S. East and Gulf coasts. But not without considerable blood on the floor.

The National Retail Federation is encouraging maritime management and the union representing dockworkers along the U.S. West Coast ports to expedite pending contract negotiations and reach agreement on a new deal well in advance of the expiration of the current contract this summer.

SAP AG announced the availability of a new application to help centralize processing trade activities, SAP Global Trade Services, processing trade in China. 



Did you know that Supplier Portals can help companies reduce risk, improve compliance and enhance product availability? Download Amber Road's latest research report featuring research from Gartner.

Article Topics

News · Global Logistics · UPS · TNT · TNT Express · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA