FedEx said it “remains confident” about its proposed takeover of TNT Express despite the European Commission launching what it termed an “in-depth investigation” into the planned acquisition.
The Commission said: “The EC is concerned that on a number of European markets for international express and regular small package deliveries, the merged entity would face insufficient competitive constraints if the takeover went ahead. This could lead to higher prices for business customers and consumers.”
It stressed the merger would leave just two other competitors with a comprehensive air and road parcels delivery network throughout Europe – Deutsche Post-owned DHL and US-based UPS. UPS abandoned its multi-billion euro bid to take over TNT Express in 2013 after the EC said it would prohibit the move.
Margrethe Vestager, EC commissioner in charge of competition policy, said: “Many businesses rely heavily on affordable and reliable small package delivery services and many consumers depend on these services to ensure rapid and safe delivery of goods they have bought. The EC must ensure that FedEx’s takeover of TNT would not impede effective competition and would not lead to higher prices.”
A FedEx spokesman told MT it would continue to work closely with the EC’s competition team. “FedEx remains confident that the combination of both companies will increase competition and create benefits for customers and that the transaction will close in the first half of 2016.”
The US parcels giant did not repeat its earlier claim that the plan had a “high level of deal certainty”.
FedEx originally announced its intention to take control of TNT Express in April (MT 13 April). If successful, the merger would create a business with a global turn-over of €49.7bn (approximately £35bn), based on 2014 revenues.
