FedEx reaches deal to buy TNT Ex­press for 4.4 bil. eu­ros

The China Post - - INTERNATIONAL - BY NI­CO­LAS DE­LAU­NAY

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.

‘Com­ple­men­tary net­works’

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.

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