FedEx bids £3.2bn to take over TNT Express
US PARCELS giant FedEx has made a £3.2bn takeover bid for Netherlands-based rival TNT Express.
FedEx’s American rival UPS’s bid for TNT was blocked two years ago by Brussels amid fears it would reduce competition.
Analysts say that the FedEx bid is much more likely to succeed as it is far smaller player in the European market than UPS.
The American company is offering eight euros per share, a premium of 33pc.
A successful takeover would mean that FedEx would become the second-biggest European express delivery company with an estimated 17pc market share.
FedEx has nearly half of the US parcel delivery market but is a minnow in Europe with only 5pc share market share.
TNT has 12pc of European parcel delivery and has an extensive road delivery network.
German company DHL has an estimated 19pc of the European market while American firm UPS has 16pc, says Dutch bank ING.
TNT’s board has unanimously accepted the bid.
The Dutch company has struggled recently and announced its fourth consecutive annual loss this February.
TNT’s biggest shareholder NL Post has also agreed to the takeover. Shares in NL Post rose 17pc on the news.
The deal is expected to go through in the first half of 2016.
Rival bids are unlikely, analysts say. A takeover bid by German firm Deutsche Post would risk breaching the European Union’s limit of 30pc of market share.
UPS has said it will not make a second bid for the firm.
FedEx should emerge as a stronger player worldwide if the deal goes through, said ABN Amro analyst Maarten Bakker. Britain’s Royal Mail competes in the European market through its subsidiary GLS.
But the British company should be unscathed if the deal goes through, said Gert Zonneveld of Panmure Gordon.
If TNT starts competing with GLS in the slower delivery market it would risk its core customers demanding lower prices, Zonneveld said.
The bid is to be financed by debt. FedEx is the latest US company to take advantage of low interest rates to launch a major takeover bid.