FedEx/TNT await competition decision

Speculation around competition and anti-trust issues has been downplayed by FedEx and TNT Express following the surprise announcement last week that FedEx Corporation had put in an all-cash offer of US$4.8bn to acquire all shares in the Dutch-owned TNT. Another United States company, United Parcel Service (UPS), bid US$6.8 billion to purchase TNT in 2012, but the deal was scrapped in 2013 as European antitrust regulators raised objections. According to Bloomberg News, the primary concern was the creation of a duopoly, where customers in Europe would be left to choose between UPS-TNT and DHL. However, FedEx believes that antitrust regulators should not have any of the same concerns they had at the time of the UPSTNT acquisition talks. According to Bloomberg, this is primarily because FedEx does not have a large market share in Europe. Therefore, a merger between FedEx and TNT will not result in a logistics giant that could significantly change market dynamics. David J Ross, regional president of Fedex Express for Middle East, Indian subcontinent and Africa, told FTW: “The acquisition will enhance global connectivity and strengthen networks in Asia Pacific, Middle East, Africa and emerging markets.” He added that the combination of TNT Express and Fedex would also increase competition in some markets. Senior press officer at TNT Express, Cyrille Gibot, commented in an e-mail to FTW: “FedEx and TNT Express are confident that anti-trust concerns, if any, will be adequately addressed in a timely fashion.” He commented that the two parties expected the transaction to be completed in the first half of 2016. “The offer is expected to be launched in the second quarter of 2015,” said Gibot. According to him there is a “high level of deal certainty”, with TNT’s main shareholder, PostNL, having “irrevocably confirmed” its support for the offer, bringing its 14.7% TNT Express shareholding to the deal. Gibot conceded that the deal was subject to a number of conditions, including regulatory clearances and approvals in Europe but added that both parties would cooperate fully with the relevant regulatory authorities. INSERT & CAPTION The acquisition will enhance global connectivity and strengthen networks in Africa. – David Ross