UPS withdraws bid for TNT
 

U.P.S. to Withdraw $6.9 Billion Takeover of TNT Express - NYTimes.com


LONDON — United Parcel Service announced on Monday that it would withdraw its $6.9 billion takeover offer for TNT Express, a Dutch shipping company, after European antitrust authorities told U.P.S. that they would block the deal.

The announcement is a blow to U.P.S.’s expansion outside of the United States as the deal for TNT Express would have given the American company a larger presence in European and emerging markets.

Since first announcing the deal last March, U.P.S. had faced difficulties with European regulators, who feared that the takeover would hamper competition.

To appease antitrust concerns, U.P.S. had agreed to sell a number of business units and to grant access to some of its airline network to rivals. TNT Express also said it would sell its own airline operations as part of the antitrust concessions.

The company had been locked in negotiations with European regulators since November, but was told late last week that its proposed concessions did not meet authorities’ demands. U.P.S. had tried to convince regulators that selling assets to the French shipping company DPD would create enough competition to satisfy regulatory concerns.
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The steps did not go far enough.

Competition authorities at the European Commission informed both companies that they would not approve the multibillion-dollar takeover, according to separate statements from U.P.S. and TNT Express on Monday. European officials have until early February to rule officially on the proposed takeover.

“We are extremely disappointed with the European Commission’s position,” U.P.S.’s chief executive, D. Scott Davis, said in a statement. “We proposed significant and tangible remedies designed to address the European Commission’s concerns with the transaction.”

The failure to reach an agreement comes at a difficult time for TNT Express, which has reduced its operations across Europe and faced a series of setbacks in emerging economies like Brazil and China. While the Dutch company has large operations across Europe, analysts say it would need a large injection of investment to expand globally.

Potential new suitors could include Federal Express, whose European business is smaller than that of U.P.S., while a potential deal with the European shipping giant DHL would raise too many antitrust concerns, according to analysts.

Shares in TNT Express fell 40 percent, to 4.94 euros, or $6.60, in morning trading in Amsterdam on Monday. U.P.S.’s failed offer for the Dutch shipping company was 9.50 euros for each share in the Dutch shipping company.

The stock price of PostNL, the largest shareholder in TNT Express, also dropped 35 percent in morning trading on Monday.

“The European Union‘s decision is very disappointing,” said Stephen Furlong, an analyst at Davy Research in Dublin, who rates TNT Express as underperform. “It’s hard to see the company being bought by anyone else.”

After failing to win regulatory approval, U.P.S. has agreed to pay a 200 million euros, or $267 million, termination fee to TNT Express, according to a company statement. The takeover would have been U.P.S.’s largest acquisition in the company’s 105-year history, according to the data provider Capital IQ. U.P.S. will continue to look for opportunities to grow organically and through acquisitions, according to a company spokeswoman.

U.P.S.’s acquisition of TNT Express is the largest failed takeover since the European aerospace giants BAE Systems of Britain and European Aeronautic Defense and Space, or EADS — the parent of Airbus — ended their proposed $45 billion merger talks in October after local politicians and shareholders balked at the deal.

The decision against U.P.S.’s takeover of TNT Express also is the latest move by European competition authorities to thwart multibillion-dollar deals that they believe are against consumers’ interest. Last year, NYSE Euronext and Deutsche Börse called off their planned $9.2 billion merger after European antitrust regulators opposed the deal.

Morgan Stanley, UBS, Bank of America Merrill Lynch and the law firm Freshfields Bruckhaus Deringer had advised U.P.S., while Goldman Sachs, Lazard and the law firm Allen & Overy had advised TNT Express and its supervisory board.

No shocker here!

Isn't there a huge penalty for pulling out of the deal?

200 Million I think.

200 M Euros! Paid to a company that probably won't survive now.

Dude, did you read the article?

200 million euro

You think? How about read the article and know.

Wow touchy much? I skimmed the article and was recalling from what I had heard on TV.

Does anyone know when this was announced? And, why did UPS withdraw the offer? :rolleyes:

Because the EC was not going to approve it anyway.

So why then post and answer a question if you don't even know the answer?

Not touchy at all.

Your sarcasm was lost on UPSFO4LIFE.

I got it though, thanks for playing.:D

Apparently, the EC prefers more people on EU welfare than working. TNT, having lost much of their business in the wake of the pending deal to mainly DHL is now so weak that they will ultimately fail, leaving untold thousands out of work entirely instead of at least some working for UPS.

But the EU held strong for European sovereignty and can hold their heads high...in the unemployment lines. :rolleyes:

Now, now, that would be relevant and useful information....never, ever, post facts and relevant info on APC...that is the quickest way to confuse people around here :D

Boy, FedEx makes out like a bandit on this one. They were fighting it hard, and the best part for them was they cost UPS 200 million bucks.

Actually $267,000,000 at today's rate.

One of the articles mentions Fed Ex as being a potential "white knight". That, along with FDX getting 143% of the postal contract should earn Scott Davis (UPS CEO) a very nice bonus. :rolleyes:

And I guess you don't come here very often!:rolleyes:

TNT stock has fallen by 49% and one analyst suggests that FedEx can make a lowball offer for TNT now and won't face the same scrutiny as UPS. Wouldn't that be something? TNT doesn't even have a CEO currently. They're screwed unless someone buys them.

I would not be surprised if that happened. FedEx could dictate their own terms.:eek:

UPS has not been able to put any deals like this together for years. Not sure why they even try. I am sure the fellows in Atlanta are all patting themselves on the back for a good ole college try. I believe this deal was doomed before it began. Too many analysts agreed. The surprising part for me was the $267 million price for pulling out with no stipulation that it must meet EU approval. I wish they were that careless negotiating contracts with the IPA and the Teamsters.

Tighten your belts. Catering is REALLY going to blow now.

Any bets on the Postal Contract:eek:

I think you got the wrong "villain" in this case. My guess is that DHL has used its political mussel to nix this deal. Given what happened in the US a few years ago, I see this as big time payback for what they may perceive as politics at their expense.

bortaS bIr jablu'DI' reH QaQqu' nay

translation from Klingon

Revenge is a dish best served cold :eek:

I tend to Agree with you Kozak...Dhl management plays hardball and with what happened with the ups-dhl-atsg debacle, it sounds like payback fron the germans...

No matter what, Davis will spin everything to his advantage.

No matter what, things worked out the way he planned. :rolleyes:

We wanted DHL/we didn't want DHL.

We wanted TNT/we didn't want TNT.

We wanted the postal contract/we didn't want the postal contract.

Does this guy not answer to anyone? If I was on the board I would be asking for a letter of resignation due to this monumental mistake! I guess 268million dollars doesn't mean much unless you want to make a statement to the pilot group and invoke a unnecessary furlough just to show the inmates who is running the joint!

Want to bet it's a write off - business expense, just like my cell phone.

$268 million is pocket change to UPS. You guys got more money than you know what to do with.

That's too bad. Those TNT 777's would have looked cool in UPS livery.

Emirates SkyCargo

I just hope the USPS contract doesn't meet the same demise.

Not this time. He looks like a stooge. Lots of management manhours wasted AND a bonus killing penalty.

I hope he doesn't try to make it up to the board by concocting a way to squeeze the $267 million out of the pilots.

That's an EXPENSIVE cell phone, maybe you should switch carriers !

:D:D:D

No "Dude", I just skimmed it quickly while I was having my first cup of coffee and missed that part. Sorry If I ruined your otherwise perfect day.

Actually I did have a pretty near perfect day, thanks for the concern.

If you actually cared what the answer to your question was and since you took the time to post, maybe you should have took the time to read the article, you just make yourself look stupid.

That is funny.

You bet they will...

Bulletins to follow:

Begin re-dispatch procedures on legs as short as SDF-ORD.

APU use prohibited between 0 F- 90F.

Rampers shall push back all aircraft.

Catering shall be left-over MREs from Afghanistan.

Crew hotels will now include hostels and Salvation Army facilities.

On 3/4 engine aircraft, one engine shall be shut down at TOD.

In the spirit of shared sacrifice, Davis shall forgo 5% of his annual bonus, and settle for a 25% salary hike.

Both UPS and Fedex had a very tough time breaking into the Euro market years ago, now with the extra added obstacles to business piled on by EU cronyism a deal like this ended up looking worse by the day.

I doubt it was bungled by the US side, in the end it just wasn't going to make them money because of all the red tape and restrictions placed on it after the negotiations started.

Wouldn't be the first time and won't be the last. Just wish I could be perfect like you.

Since you cared so much to bash everyone else for their inattentiveness to detail perhaps you should have "taken" the time to learn proper grammar! :p

I bet you do.:D

Well played, at least I spelled it write.:D