TNT said it is more certain about its future after the collapse of its multi-billion euro acquisition by UPS last week, despite analysts warning that the industry giant needs to “work out what is going on”.
UPS pulled the plug on the €5.16bn (£4.31bn) deal after it became clear that the European Commission (EC) would veto the acquisition, which had been bogged down in EC red tape for the past 10 months, due to competition concerns.
UPS said it was disappointed with the EC’s position, and that the deal would have transformed the industry.
Alistair Cochrane, MD of TNT Express UK and Ireland, said: “It’s been a difficult year, but since the announcement we have more certainty about our future. We were up in the air, but now we are focused on our own long-term strategy and our key strengths.”
Before the UPS offering, TNT UK boosted turnover to £791m, according to its most recent results for the year ended 31 December 2011, from £758m in the previous year.
However, it suffered a 64% dip in year-on-year pre-tax profit to £3.49m (2010: £8m).
Mark O’Bornick, analyst at Analytiqa, said: “TNT will release a strategic review in due course, but must focus on the challenges it set itself prior to the UPS distraction.”
Frank Proud, analyst at Apex Insight, agreed: “It has been a distraction for management. The chief executive [Marie-Christine Lombard] moved on [in September], and they will be going back to the drawing board and working out what is going on.”
An analyst at Transport Intelligence has even suggested that blocking the deal will likely reduce competition within the European freight market rather than safeguarding it as intended by the EC.
