Parcel Wars: FedEx to buy TNT as European fight against DHL and UPS continues

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FedEx Corporation and TNT Express today announced that they have reached a conditional agreement on a recommended all-cash offer for all issued and outstanding ordinary shares, including shares represented by American Depositary Receipts of TNT Express for a cash offer price of €8.00 per share cum dividend except for the TNT Express final 2014 dividend of €0.08 in a transaction valuing TNT Express at an implied equity value of approximately €4.4 billion.

Both sides reportedly said early Tuesday that the combined group would create a strong third competitor in Europe to take on DHL and UPS, and expected no repeat of European regulatory issues that scuppered a previous takeover attempt by UPS in 2013.

Frederick Smith, Chairman and CEO of FedEx Corp, said: “We believe that this strategic acquisition will add significant value for FedEx shareowners, team members and customers around the globe. This transaction allows us to quickly broaden our portfolio of international transportation solutions to take advantage of market trends – especially the continuing growth of global e-commerce – and positions FedEx for greater long-term profitable growth.”

The combined companies would be a strong global competitor in the transportation and logistics industry, drawing on the considerable and complementary strengths of both FedEx and TNT Express.

Tex Gunning, CEO of TNT Express, said: “This offer comes at a time of important transformations within TNT Express and we were fully geared to executing our stand-alone strategy. But while we did not solicit an acquisition, we truly believe that FedEx’s proposal, both from a financial and a non-financial view, is good news for all stakeholders. Our people and customers can profit from the true global reach and expanded propositions, while with this offer our shareholders can already reap benefits today that otherwise would only have been available in the longer run.”

Both companies’ customers would enjoy access to a considerably enhanced, integrated global network. This network would benefit from the combined strength of TNT Express strong European road platform and Liege hub and FedEx’s strength in other regions globally, including North America and Asia. TNT Express customers would also benefit from access to the FedEx portfolio of solutions, including global air express, freight forwarding, contract logistics and surface transportation capabilities.

With annual revenues of $47 billion, FedEx is consistently ranked among the world's most admired and trusted employers with more than 325,000 team members. For more information, visit news.fedex.com