Almunia Says Conducting UPS-TNT Remedies Market Test
United Parcel Service Inc. (UPS)’s rivals were asked to examine concessions that the world’s biggest parcel company offered European Union regulators probing its 5.16 billion-euro ($6.75 billion) bid for TNT Express NV. (TNTE)
“We have carried out a market test of the remedies proposal,” EU Competition Commissioner Joaquin Almunia told reporters in Brussels today. He said he’d come back to the two companies “informing them of some of our concerns given the results.” The market test process hasn’t yet been completed, Almunia’s spokesman Antoine Colombani said in an e-mail.
UPS submitted an offer to regulators last week that included the sale of some business units and granting access to its air network. UPS has twice pushed back the target date to complete the biggest acquisition in its 105-year history, which will double its size in Europe, as the merger review continues.
UPS’s rivals and customers are being asked to comment on the company’s proposal and their feedback will be used by the EU to determine whether the offer is sufficient to resolve competition problems. Regulators sent formal objections to UPS in October, saying the acquisition would remove one of its few serious rivals in the European delivery services market, according to a person familiar with the regulators’ complaint.
TNT advanced as much as 29 cents, or 4 percent, to 7.64 euros and traded 2.2 percent higher as of 2:55 p.m. in Amsterdam. The stock has gained 30 percent this year, valuing the Dutch company at 4.08 billion euros.
UPS’s bid for TNT required “substantial remedies” to eliminate EU antitrust concerns, Almunia said in a Nov. 2 speech. Regulators still have time before they needed to prepare a decision on the UPS-TNT deal, he said today. The official deadline for a ruling is Feb. 5.
“After Christmas we will need to have a draft decision and for this time we will need to make up our final opinion regarding the capacity of the remedies finally proposed by UPS and TNT,” he said today.
UPS is committed to the transaction and is working with EU officials on the regulatory review, said Peggy Gardner, a spokeswoman for the company in Atlanta. UPS said it still hopes to finalize the purchase in 2013.
“We still have a strong belief that the transaction will help meet the EU’s objectives of making cross-border commerce flow more smoothly,” Gardner said.
EU regulators prefer merger remedies that are “simple, workable and easy to implement,” Alexander Italianer, the antitrust agency’s most senior official, said at a Brussels conference today.
An offer of access to critical technology or infrastructure needs to be straightforward and must be able to be monitored effectively to be successful, he said. He didn’t refer to the UPS-TNT transaction.
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