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.