UPS Takeover Probe Seeks TNT Replacement, Almunia Says
United Parcel Service Inc. (UPS)’s proposed 5.16 billion-euro ($6.9 billion) takeover of TNT Express NV (TNTE) would require another company to fill the void with similar market power, the European Union’s antitrust chief said.
“We need to substitute the TNT role as integrator with an equivalent player one way or another,” Joaquin Almunia told reporters on the sidelines of a conference in London today. So- called integrators, such as Deutsche Post AG (DPW)’s DHL, are parcel- delivery firms that offer air-freight services.
Regulators sent formal objections over the takeover in October, saying TNT and DHL, the market-share leader, are UPS’s main competitors for next-day express deliveries within Europe, according to a person familiar with the EU complaint. UPS’s plan requires “substantial remedies” to eliminate EU antitrust concerns, Almunia said in November.
The EU is currently reviewing UPS’s concessions, such as selling assets and offering air-network access to rivals, as the company seeks antitrust approval for the biggest acquisition in its 105-year history.
“We are looking into the remedies that the parties have proposed,” and “to what extent those remedies can provide the same kind of competitive pressure in this market,” Almunia said today. He said ongoing talks between UPS and regulators are “friendly” and that the EU’s review covered “every one of the markets in the member states including in eastern Europe.”
The EU’s antitrust regulator set a formal Feb. 5 deadline to rule on the deal.
“Under some conditions in merger cases the clock can be stopped, but so far I don’t see these conditions in this case,” Almunia said on the possibility of suspending the regulatory review of the deal to finalize details.
UPS didn’t immediately respond to an e-mail seeking reaction to Almunia’s comments.
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