UPS makes informal $15 billion bid for TNT
 

UPS makes informal $15 billion bid for TNT
By Ruth Mantell, MarketWatch

Last update: 1:23 p.m. EDT Aug. 10, 2008
WASHINGTON (MarketWatch) -- UPS Inc. has informally offered 10 billion euros ($15 billion) for Dutch delivery firm TNT NV, according to a report in The Sunday Telegraph.
There have been early-stage talks in recent days, despite some reluctance from TNT, the report said.

UPS, based in Atlanta, is the world's largest package delivery company, while TNT, which serves more than 200 countries, has a strong European presence.

A deal could lead to cost saving, and further UPS's European market penetration, according to the report, which said the deal would give UPS a full air and road delivery network in Europe.

The UPS plan could include selling TNT's its postal division, it said.

In July, UPS reported a second-quarter drop of 18.3% in per-share earnings. The company cited higher fuel costs and a stagnant U.S. economy leading to declines in U.S. domestic and international package segments. Also last month, TNT reported its second-quarter results, which came in at a worse-than-expected 16% fall in net profit.

UPS has picked Morgan Stanley as its adviser, while Goldman Sachs is advising TNT, the report said.

I hope we're successful.

This isn't surprising, as UPS has been hinting at making a large capital expenditure. Looks like this might be what they had in mind.

TNT is large in Europe, I have seen their trucks everywhere. We could even surpass DHL to become #1 in the Euro-zone if this deal passes.

The only question is what UPS would do with their air network out of Liege, Belgium. A mix of B737's, Bae 146s, A-300's, and contract -400's. Over 40 aircraft. Guesses, anyone?

TNT FACTS N FIGURES

TNT Express is the only major express delivery company that does not impose consignment size or weight limits.

TNT Express handles up to 80 aircraft landing and departures per night at its European Air Express Hub in Liège, Belgium from 67 airports across Europe.

TNT Express trucks and vans drive over 1,900,000km per week in Europe.

The total length of the conveyor belts at the Liège air hub is 6.5km.

Business volumes for TNT Express in the Gulf have increased fourfold over the past three years and the company now commands a market share of 18% compared with 16% in 2001.

Founded at the end of 1995, TNT Express is the youngest express carrier in Bulgaria but has the fastest revenue growth - 30 % per year.

TNT Express in Russia has the widest coverage of the Russian territory of any delivery company, servicing over 5,500 cities and 11 time zones.

They'll order more and bigger airplanes for them so they can grow - this way they'll be able to outsource some of our flying to this UPS Europe branch.

And with the resultant loss of flying, you junior guys will be furloughed. I hope that you are being sarcastic, but after reading lots of UPS posts on this forum, I don't think you are. You really should become better informed about your company and the industry in which it operates. While it's good to be very suspicious of UPS, their sole goal is not to screw you or the IPA.

TNT owns 4 relatively new 747-400s that UPS would love to get it's hands on. The rest of their fleet is a mix of owned and chartered aircraft that would have no place in UPS' fleet.

I don't think the company's goal is to screw IPA, not at all. However they want to make money, and as much of it as possible - which is great because that's what keeps us employed.

I do try to become more informed however I believe growth from within is the best way to go. As far as TNT - well the question was asked what we think will happen with the TNT's air side? I don't think my response implies that the company wants to "screw IPA" but rather that it'd maximize the returns, that’s all.

I'd have said the same thing if Fedex bought TNT (which still might happen).

I think that those of us who actually work for UPS know all about UPS. Some may talk crap on here, but those I fly with and those I see at work fully understand the industry and UPS. Actually, nobody understands UPS, and as soon as you accept that, then you understand UPS.

And your last point I don't agree with. They do try to screw the IPA at almost every corner. If you worked here, you would see that.

I agree. We will fly what we can legally based on the international agreements.
A lot of the new volume will probably end up being moved on the ground just as the DHL U.S. would/will via an expanded ground network.

I used to think that UPS conspired against me then I figured out that they just make as much money as they can.

Well, then if you read my post again you'll realize that we're saying the same thing - I did not say they were conspiring against us but simply wanted to make as much money as they can...

They wouldn't need to be placed into UPS's fleet because they will continue to operate for TNT in Europe. These planes are operated by different companies in the EU, and are probably operated more efficiently than UPS could operate them.

I would doubt any of their flying would go to the IPA.