FedEx Corp. offered to acquire financially struggling Dutch logistics company TNT Express NV for 8 euros a share in cash as the U.S. company seeks to expand package deliveries in Europe.
The offer is 33 percent more than the April 2 closing price for TNT’s shares, the two companies said in a statement released via Business Wire. The companies reached a conditional agreement on the deal, according to the statement.
The offer comes more than two years after FedEx competitor United Parcel Service Inc. scrapped its own bid to purchase TNT when European regulators moved to block the deal. Adding TNT will bolster the European air and ground network for FedEx, the operator of the world’s largest cargo airline. Expansion in Europe is one pillar of Chief Executive Officer Fred Smith’s 2012 plan to boost profit by $1.7 billion.
For TNT, completing the sale would mark success in its effort to find either a turnaround strategy or an alternative exit plan since the $6.9 billion UPS bid fell apart in January 2013. TNT competes in Europe against companies including Deutsche Post AG’s DHL Express unit.
TNT has been selling assets to bolster its finances and focus more on European overland transport. Struggling with four straight annual losses, the company shed its Dutch fashion operations in 2014 and an unprofitable Chinese trucking unit in November 2013.
European Union regulators formally blocked UPS’s TNT bid because the Atlanta-based company failed to find a suitable buyer for parts of TNT to ensure that competition for delivery services wouldn’t be squelched.
With FedEx’s limited reach across Europe, a UPS-TNT deal would have limited some shipping customers’ choices for next-day deliveries to just UPS and DHL, regulators said at the time.
FedEx fell 4 percent this year through Monday, trailing the 1.1 percent advance for the Standard & Poor’s 500 Index. TNT rose 8.4 percent in 2015 through April 2 in Amsterdam.
FedEx has a history of buying smaller companies around the globe, including in Poland, France, South Africa and Brazil. In January, the Memphis, Tennessee-based company closed its most-recent major purchase, the $1.4 billion acquisition of product-return firm Genco Distribution System Inc.