By Gabriele Steinhauser
BRUSSELS--The European Commission on Friday opened an in-depth
investigation into FedEx Corp.'s EUR4.4 billion ($4.8 billion) deal
to buy TNT Express NV, saying it was concerned about the merged
company's dominance in the international delivery of small packages
in some European markets.
The commission, the European Union's antitrust watchdog, said
the two remaining international delivery companies, United Parcel
Service Inc. and DHL Worldwide Express Inc., may not provide
sufficient competition to the merged company.
"This could lead to higher prices for business customers and
consumers," the commission said. The two companies announced the
deal in April.
TNT shares traded down about 1% after the announcement, while
FedEx stock was up 0.2%.
The commission now has until Dec. 8 to investigate the proposed
acquisition and to decide whether to approve the deal or ask the
companies for concessions to ease its concerns. If it fails to
reach an agreement on how to bring the acquisition in line with EU
competition rules, the commission can also decide to block the
merger.
"We will continue to work together with TNT Express to meet the
European Commission's need for additional due diligence and are
confident that the combination of both companies will increase
competition and create benefits for customers," said FedEx's
Patrick Fitzgerald, senior vice president integrated marketing and
communications, in a statement.
He said that company continues to make progress on regulatory
steps around the world, which would allow it to complete the
transaction in the first half of 2016.
TNT Express said it is committed to closing the deal in the
first half of 2016 and looks forward "to the success of the
intended acquisition."
In 2013, the commission quashed an attempt by UPS to buy TNT for
around $7 billion.
EU Competition Commissioner Margrethe Vestager said affordable
and reliable delivery of small packages was important for consumers
and many businesses, especially for online shopping. "The
commission must therefore make sure that FedEx's takeover of TNT
would not impede effective competition and would not lead to higher
prices for consumers, " she said.
Laura Stevens in Atlanta contributed to this article.
Write to Gabriele Steinhauser at
gabriele.steinhauser@wsj.com
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