FedEx formalizes offer for TNT Express

Netherlands-based parcel courier TNT Express is expected to approve the $4.8 billion acquisition in October, but the transaction will still be subject to regulatory and anti-trust approval.    FedEx on Friday formalized its preliminary April offer to buy Netherlands-based parcel courier TNT Express for $4.8 billion.
   Under terms of the deal, TNT shareholders will have until Oct. 5 to accept the all-cash offer of 8 euros (U.S. $9.05) per share, which management and the executive board have recommended. The Dutch Postal Service, PostNL N.V., currently owns 14.7 percent of TNT’s shares and has committed to tender them.
   TNT Express has scheduled a shareholder meeting the morning of Oct. 5 to vote on the FedEx takeover.
   The transaction would allow FedEx to plug a European hole in its global express delivery network. FedEx has an international air hub in Paris, but doesn’t have the ground terminals and trucks to support domestic courier business within Europe. TNT’s strength is its expansive European road network and its hub in Liege, Belgium.
   FedEx has more extensive global forwarding and contract logistics businesses, operations in Asia and a dominant position in the U.S. market. Officials see the combination as giving TNT customers access to more global services and enhancing access to Europe for FedEx customers.
   FedEx says it plans to invest in the TNT Express business to support its growth. 
   The Memphis, Tenn.-based integrator said that David Binks, currently FedEx’s European regional president, will take over as chief executive officer of TNT on the settlement date, and current CEO Tex Gunning will resign. Maartin de Vries will remain as chief financial officer for six months.
   FedEx will divest TNT’s airline to comply with European foreign ownership rules, and transition intercontinental air operations to FedEx Express.
   The deal must still win approval from European Union regulators, as well as antitrust regulators in Brazil and China.
   “FedEx and TNT Express are on track to obtain all necessary approvals and competition clearances,” the companies said in a joint statement.
   The European Commission is conducting an in-depth review of the deal and officials last month expressed initial concerns that the merged entity would leave consumers with too few choices in the parcel market. FedEx and TNT argue that their networks are highly complementary and will enhance competition in a market where Deutsche Post DHL and UPS already have strong shares.
   The companies said they expect to finalize the transaction in the first half of 2016.