Brussel stops merger of ups and tnt express

Brussel stops merger of ups and tnt express

As expected, the european competition watchdogs have vetoed the bill. "After the takeover, there were only two or three suppliers left in 15 eu countries and prices were very likely to have risen," is how eu competition commissioner joaquin almunia justified the ban on wednesday.

This is good news for deutsche post with its parcel and express brand DHL. UPS is a major competitor and wanted to enter the growing european express market with the TNT acquisition. This crude attack on the bonn-based company is now cancelled. Actually, the americans wanted to swallow the dutch competitor for 5.2 billion euros.

UPS was informed about the EU-restrictions and therefore had cancelled the takeover two weeks ago. After the decision, the group appeared disappointed. "UPS believes that the combined company had transformed the logistics industry and brought significant benefits to customers," said the U.S. Company based in atlanta.

Now the company wants to concentrate again on its own growth and is withdrawing its offer for TNT. UPS is in for a rough ride: the company agreed to pay 200 million euros in damages to the dutch company. According to almunia, the no from brussel is bearable for the groups. They could appeal the decision to the european court of justice. Europe’s antitrust watchdogs rarely issue bans. The last time the EU commission banned the merger of the german and new york stock exchanges was a year ago. Almunia says brussel has banned only three of 800 traps in the past three years.

The commission stressed that only four companies in the region offer a similarly broad range of air and land parcel services. In addition to UPS and TNT, these are deutsche post DHL and the US company fedex. Their offer includes international deliveries by courier, express and parcel services. National postal operators could not compete in this field.

Almunia argued that the EU commission had ruled in favor of consumers. In the EU, many companies had to send parcels – such as medicines, blood reserves or important documents – within 24 hours: "there must be affordable and reliable delivery services," the antitrust watchdog stressed.

The fusion partners had approached brussel and granted concessions – but these were not sufficient. According to almunia, UPS was willing to sell TNT subsidiaries in the 15 EU countries for the merger. UPS also wanted to give the buyer access to its airline network.

The collapsed deal is also bad for postnl. The dutch company was only formed in 2011 from the split of TNT into the mail business and the express division TNT. Postnl holds 30 percent of TNT shares and had expected the sale to yield a billion-dollar windfall.

Europe is a huge market for courier, express and parcel services. According to a study by the consulting firm A.T. Kearny in 2011 at 47.2 billion euros.

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