TNT Express rejects $6.4 billion UPS buyout

Talks between two are ongoing; bidding war eyed.

By Mark B. Solomon

After more than a year of takeover speculation, parcel carrier TNT Express is in play.

The Dutch delivery firm said Friday that it rejected a $6.4 billion all-cash buyout offer from UPS Inc., but added that talks between the two are ongoing. The UPS proposal represents a 43-percent premium over TNT's Friday closing price in European trading.

The deal, if consummated, would be UPS's biggest acquisition in its 105-year history.

On Jan. 1, 2011, TNT Express's parent separated the express and mail operations. The move, which had been telegraphed several months before, allowed the parent to exit the express business and focus exclusively on its mail operations.

The transaction triggered speculation that TNT Express would be the subject of a bidding war among FedEx Corp., UPS, and DHL Express. FedEx and UPS seemed to be the most likely acquirers, as TNT Express's strong intra-European delivery operations would help strengthen their competitive positions against DHL, considered the market leader in Europe.

TNT Express also has a solid intercontinental business linked to Europe but virtually no presence in the United States.

FedEx, which could benefit the most because it is considered to have the shallowest presence in Europe, has been decidedly cool toward TNT Express. Nearly a year ago, FedEx CFO Alan B. Graf Jr. told an investor's conference that the business was too expensive for FedEx to make a bid.

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.

Comments powered by Disqus

Feedback: What did you think of this article? We'd like to hear from you. DC VELOCITY is committed to accuracy and clarity in the delivery of important and useful logistics and supply chain news and information. If you find anything in DC VELOCITY you feel is inaccurate or warrants further explanation, please ?Subject=Feedback - : TNT Express rejects $6.4 billion UPS buyout">contact Editorial Director Peter Bradley. All comments are eligible for publication in the letters section of DC VELOCITY magazine. Please include you name and the name of the company or organization your work for.