FedEx reaches deal to buy TNT Express for 4.4 bil. euros
U. S. delivery service FedEx reached a deal Tuesday to buy Dutch rival TNT Express for 4.4 billion euros ( US$ 4.8 billion), ramping up its European presence as global e-commerce proliferates.
The companies “reached conditional agreement on a recommended all-cash public offer of 8.00 euros per ordinary TNT Express share,” a joint statement said.
The offer represents a premium of 33 percent over the closing share price of April 2, 2015, and a premium of 42 percent over the average share price over the last three calendar months.
TNT’s share price jumped by around 30 percent in mid-morning trade on the Amsterdam stock exchange’s AEX index to 7.80 euros a share.
Dutch mail service PostNL, which owns 14.7 percent of TNT Express, has agreed to the offer.
The surprise announcement comes two years after a failed attempt by FedEx’s U.S.-based rival UPS to grab TNT Express for more than 5.0 billion euros.
That deal would have seen the creation of the biggest European group in the fight for the global parcel market.
The deal was torpedoed after European competition authorities failed to give it the green light saying it would have restricted competition on the continent.
On Monday, both FedEx Express chief executive David Bronczek and his counterpart at TNT Express Tex Gunning said they were confident the deal will be passed by regulatory authorities.
“The transaction will increase competition in Europe. We say a third strong competitor in this marketplace is essential,” Bronczek told reporters via a teleconference call.
Bronczek said the FedEx and TNT Express networks are “extremely complementary.”
“TNT has an exceptional European road platform. It will greatly improve our (FedEx’s) ability to serve European customers,” he said.
“FedEx has always been recognized to have a need for a stronger pan-European ground network to complement our strong intercontinental network,” said Bronczek.
TNT Express boss Gunning said the unsolicited offer came at a time of “important transformations” for the company.
Gunning brushed off reports that the deal would lead to job cuts at TNT Express, which employs some 65,000 people worldwide.
“There is little overlap and therefore much less risk of redundancies,” Gunning said via teleconference.
The two companies expect the deal to close in the first half of 2016.