EU Approves FedEx Acquisition of TNT Express -- Update
January 08 2016 - 7:23AM
Dow Jones News
By Tom Fairless
BRUSSELS--European Union regulators have unconditionally
approved FedEx Corp.'s acquisition of Dutch parcel company TNT
Express NV, ending a six-month antitrust investigation that had
been one of the biggest hurdles toward the near-$5 billion
deal.
The merger, announced in April, would allow FedEx to acquire an
extensive ground network in Europe, making it a bigger player in
the burgeoning e-commerce market.
The approval had been expected since FedEx said in October that
European regulators wouldn't challenge the transaction. That was
seen as an unexpectedly easy pass from Europe's antitrust cops, who
had blocked a similar deal between rival United Parcel Services
Inc. and TNT in 2013.
The European Commission, the bloc's top antitrust authority,
opened a full investigation into the deal in July, warning that the
merged company may face insufficient competition on certain parcel
delivery routes, which could lead to higher prices for businesses
and consumers.
But on Friday, the regulator said it had concluded that the
delivery companies weren't particularly close competitors in
Europe, and that the merged entity would "continue to face
sufficient competition from its rivals."
"We are extremely pleased to receive the European Commission's
unconditional approval," said David Binks, FedEx's regional
president for Europe.
Mr. Binks said the deal, which will create the third-largest
company in Europe's international express-delivery market behind
DHL and UPS, would "provide significant value to the employees,
customers and shareholders of both companies."
EU antitrust chief Margrethe Vestager said her agency had
"thoroughly assessed the markets affected" by the deal due to the
importance of affordable package delivery for many businesses and
consumers, particularly in the burgeoning e-commerce market.
"The conclusion is that European consumers will not be adversely
affected by the transaction," Ms. Vestager said.
Executives at both companies had maintained the deal was
substantially different from Atlanta-based UPS's attempt because
FedEx's operations in Europe are much smaller than UPS's were.
UPS had revised its EUR5.2 billion ($5.63 billion) proposal,
then valued at nearly $7 billion, three times and made plans to
create a pan-European competitor in the overnight-parcel-delivery
market, but failed to satisfy the EU's concerns.
FedEx said it is working "constructively" with regulators that
haven't approved the transaction, notably in Brazil and China. The
company said it expects the deal to close by June.
Write to Tom Fairless at tom.fairless@wsj.com
(END) Dow Jones Newswires
January 08, 2016 07:08 ET (12:08 GMT)
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