The European Commission (EC), the European Union's (EU) antitrust arm, has told FedEx Corp. and TNT Express that it will not file any objections to FedEx's proposed $4.8-billion all-cash acquisition of Dutch-based TNT, the companies said today in a joint statement. The EC's decision clears the way for the deal to close in the first half of 2016, the companies said.
The EC had an Oct. 23 deadline to file any objections to the deal, but told the companies it planned to take no action by that date, the companies said. In late July, the EC said it had opened an "in-depth investigation" to determine whether the proposed deal complied with EU merger guidelines.
TNT Express' shareholders approved the proposed offer earlier this month.
The transaction, announced in April, is the largest in Memphis-based FedEx's 44-year history. It melds TNT Express' strong intra-European road network with FedEx's global capabilities, which feed largely off of its North American and Asia-Pacific air and ground infrastructure.
The transaction also elevates FedEx's stature in the competitive pan-European parcel market, which includes UPS Inc., DHL Express, and TNT Express. Though market-share estimates vary, the common view is that DHL, a unit of German postal and logistics giant Deutsche Post DHL, is the market leader, and FedEx is the market laggard. The TNT acquisition brings FedEx into relative parity with UPS in Europe.
In 2012, Atlanta-based UPS proposed to purchase TNT Express for $6.8 billion. However, UPS withdrew its offer in January 2013 after regulators said they would oppose the deal due to anticompetitive concerns. At the time the FedEx-TNT Express deal was announced, industry experts predicted that the EC would approve the deal without concessions because FedEx would not end up with the same market share as would a combined UPS-TNT Express entity.
