UPS withdraws meger offer to TNT Express
United Parcel Service, Inc. (UPS) has released a statement stating intent to withdraw its offer of acquisition of TNT Express (TNT), following the European Commission’s (EC) decision to prohibit the proposed offer.
Following an offer by UPS in February 2012, UPS began the competitive review process with the EC the following month.
During the offer process, UPS submitted an initial remedies proposal in November 2012, and subsequently revised the proposal twice in an effort to meet the offer condition relating to EU competition clearance.
Following a meeting between UPS and the EC, the EC informed UPS and TNT that it is working on a decision to prohibit the proposed acquisition resulting in UPS’s decision to stop pursuing the merger.
In a statement on the UPS website, Scott Davis, UPS Chairman and CEO said: "We are extremely disappointed with the EC's position. We proposed significant and tangible remedies designed to address the EC's concerns with the transaction. The combined company would have been transformative for the logistics industry, bringing meaningful benefits to consumers and customers around the world, while supporting growth in Europe in particular."
UPS will now withdraw their offer to TNT Express, paying them a termination fee of €200 million. According to their online statement, the company will continue to execute their growth strategy, with further announcements to be made once the European Commission has issued its formal decision.
A statement from TNT on their website expresses regret for the termination of the merger, and vows to ensure that it’s management now focuses on strengthening its strategy, improving profitability and ensuring the engagement and commitment of employees.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany