UPS Appeals EU Rejection of $6.7 Billion TNT Express Bid
United Parcel Service Inc. (UPS) appealed the European Union’s decision to block its 5.16 billion-euro ($6.7 billion) bid for TNT Express NV (TNTE) to clarify the regulator’s legal arguments, not to renew its interest in the Dutch rival.
“The reason to appeal would be to ensure a more accurate assessment of the EU competitive landscape and that there’s no precedent that could limit international growth opportunity,” Peggy Gardner, a spokeswoman for Atlanta-based UPS, said by telephone yesterday.
The world’s largest package-delivery company ended its pursuit of TNT on Jan. 14 after the European Commission, the EU’s antitrust watchdog, indicated it would prohibit the deal. The purchase would have doubled UPS’s footprint in Europe and helped it compete with Deutsche Post AG (DPW)’s DHL unit.
“The appeal is intended to clarify the EC’s legal assessment of the dynamics of the European express market,” TNT said in a statement today. “It does not imply a renewal or reconsideration of the previously proposed UPS offer.”
UPS slid 0.4 percent to $83.23 at the close of New York trading, while fell 0.1 percent to 5.75 euros in Amsterdam.
The commission formally rejected UPS’s takeover on Jan. 30, saying UPS failed to find a suitable buyer for parts of TNT to ensure competition wouldn’t be stifled. UPS was trying to divest parts of TNT to La Poste SA’s DPD unit. EU Competition Commissioner Joaquin Almunia said combining UPS and TNT would have increased express-delivery prices in 29 countries.
“We will defend our decision in court,” Antoine Colombani, a spokesman for the commission’s competition unit, said in an e-mail.
Appeals of commission decisions are filed at the EU General Court. Rulings by the Luxembourg-based court can take an average of two years.
The deal was the third blocked by Almunia after he took over as the EU’s top competition watchdog in 2010. The commissioner has since vetoed Ryanair Holdings Plc (RYA)’s 694 million-euro bid for Aer Lingus Group Plc. (AERL)
While the EU had said FedEx Corp. (FDX) was “the only possible suitable purchaser” for the assets that would need to be divested, that Memphis, Tennessee-based company’s limited reach across Europe meant some customers would only be able to choose between UPS-TNT and DHL for next-day deliveries. FedEx wasn’t interested in buying TNT’s assets.
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