European Union antitrust regulators have found no objections to FedEx’s €4.4 billion (US$5 billion) acquisition of TNT Express, the two companies said on Tuesday. “FedEx and TNT have been informed by the European Commission that no Statement of Objections will be issued. FedEx and TNT continue to expect that the Offer will close in the first half of calendar year 2016,” the companies said in a joint statement.
With a European market share of 17 per cent, the combined company would be Europe’s second-biggest express delivery business, behind Deutsche Post’s DHL but ahead of UPS. The deal would also strengthen FedEx’s position as the world’s No.3 player.
Prospects for a reduction in the number of major European players from four to three had triggered an in-depth review by the European Commission on 31 July, because of concern that the deal could reduce competition and result in higher prices.
There had been persistent speculation that European competition concerns might cause problems for the deal with the regulator expected to express concern over FedEx’s plans for its two European air hubs — in Paris and Cologne — and TNT’s hub in Liege, Belgium. The regulator had also been reported to be concerned that the merged company would have a dominant position on some routes between Europe and China and India.
UPS had sought to buy TNT in 2012 for 5.2 billion, but the bid was quashed by the Commission because the combined company would have controlled more than 30 per cent of the European market. UPS has challenged the Commission’s decision and has been lobbying against the proposed FedEx deal.
FedEx agreed the takeover with TNT in April with the Netherlands-based company having been making losses in the highly competitive express parcels market, including a €137 million loss in the final quarter of last year, clearly keen to find a merger partner.