UPS is pulling out of its planned R60.7 billion bid for TNT Express following an indication from the European Commission that it would rule against the deal, reports Air Cargo World.
The Commission is not due to announce the formal outcome of its antitrust investigation until February 5, but in the curious parlance of the European Union, advised both companies that it was “working on a decision” to prohibit the acquisition.
The thumbs-down represents a serious blow to UPS’s aspirations in Europe.
The company had wanted not only to benefit from TNT’s regional network, but also to tap into its Dutch-headquartered rival’s business in the rapidly expanding markets of Asia and Latin America.
In earlier efforts to overcome competition issues and clear the way for a deal, UPS offered to sell certain key assets in Europe to French parcel group DPD, and provide space on its aircraft. When that complex proposal fell apart, UPS negotiated with FedEx on the possibility of giving up some of the operations in 15 countries, primarily in eastern Europe, that it would have acquired with TNT. However, FedEx made clear in recent days that it wanted more than UPS was offering.
The Commission may already have reached the conclusion by this time that a takeover by UPS would have restricted consumer choice by leaving those parts of Europe where FedEx lacks a strong presence effectively in the hands of just the UPS-TNT combine and DHL.
