It has been over a year since the European Commission (EC) blocked the merger of UPS and TNT Express from taking place. However, the EC has only recently published the summary of its decision on the merger, which was met with strong opposition from UPS.

The merger, which was prevented from taking place in January 2013, would have created a multi-million euro business had it happened. It was instead ‘blocked’ by the EC, which feared it would reduce competition among major parcel delivery firms in some European countries.

The decision summary arrived earlier this month when the parcels industry had long since breathed a sigh of relief after the potential merger was denied. In the document, the EC claimed it would have reduced competition in the international delivery sector in 15 countries, where Fed-Ex, DHL, UPS and TNT are the main players.

Despite having two air hubs and a huge ground network across Europe, the summary document concluded that Fed-Ex would not have provided sufficient competition to the merged company. It claimed Fed-Ex had a weaker market share, “inferior” coverage compared to other integrators (parcel carriers that have their own end-to-end delivery network, including an air network), a network that was comparatively “less developed”, and higher European pick up and delivery costs than UPS and TNT.

Although DHL was considered the closest competitor to both parties, the EC said customers in these countries would only be able to choose between UPS/TNT and DHL for international deliveries after the deal. It claimed that this would give both firms “an incentive to increase prices after the merger”.

In a statement responding to the summary document, UPS said: “The EC's analysis recognised that 95% of the combined UPS and TNT business was not problematic.

“Additionally, there were no concerns in the countries that drive 80% of European Union GDP, namely France, Spain, Germany, Italy and the UK. In the 15 countries where concerns were identified, UPS proposed significant and tangible remedies.”

When approached by The Hub for comment, TNT did not respond.

UPS subsequently appealed the result of the decision last year.

“The decision was not based on an accurate assessment of the multi-product nature of customer contracts, it erroneously focused on a single product (next day cross-border shipments), ignored significant evidence from UPS and TNT about the strength and number of other competitors, and considered only a fraction of the efficiencies that would have been created following the acquisition,” UPS said.