FedEx has made an offer to acquire TNT Express, valuing the business at €4.4bn (£3.2bn), in a deal that both parties describe as having a high level of certainty.
The offer already has the backing of PostNL (parent company of Whistl, formerly TNT Post) – which is tendering its 14.7% shareholding in TNT Express.
In a joint statement, both parties said that the existing employment terms at TNT Express will be respected and TNT Express’ European headquarters would remain in Amsterdam, as would its hub facilities in Liege. It is expected that the offer would close in the first half of 2016.
Frederick Smith, chairman and chief executive of FedEx said: “We believe that this strategic acquisition will add significant value for FedEx shareowners, team members and customers around the globe. This transaction allows us to quickly broaden our portfolio of international transportation solutions to take advantage of market trends – especially the continuing growth of global e-commerce – and positions FedEx for greater long-term profitable growth.”
The joint-statement said that the combined companies would be a strong global competitor in the transportation and logistics industry, with customers enjoying “access to a considerably enhanced, integrated global network”.
It added: “This network would benefit from the combined strength of TNT Express strong European road platform and Liege hub and FedEx’s strength in other regions globally, including North America and Asia. TNT Express customers would also benefit from access to the FedEx portfolio of solutions, including global air express, freight forwarding, contract logistics and surface transportation capabilities.”
TNT Express chief executive Tex Gunning will remain on the executive board of TNT Express. He said of the deal: “This offer comes at a time of important transformations within TNT Express and we were fully geared to executing our stand-alone strategy. But while we did not solicit an acquisition, we truly believe that FedEx’s proposal, both from a financial and a non-financial view, is good news for all stakeholders.
“Our people and customers can profit from the true global reach and expanded propositions, while with this offer our shareholders can already reap benefits today that otherwise would only have been available in the longer run,” Gunning added.
TNT Express will remain as a brand name for what both parties describe as "an appropriate period".
Combining both companies would create a business with a global turnover of €49.7bn based on 2014 revenues. By comparison rival Deutsche Post DHL Group had an annual turnover of €56.6bn in 2014.
In 2012 FexEx rival UPS made a bid for TNT Express, in a deal that would have created a business with an annual turnover at the time of €45bn. UPS pulled out of the deal a year later after he European Commission (EC) told both parties that it planned to prohibit the merger.
More recently, in the UK, TNT Express saw the MD Alistair Cochrane leave the business at the end of 2014 and replaced by current MD Marianne Culver last month. Last week it appointed ex-City Link finance director Robert Peto to its board.
According to the Motor Transport Top 100, based on filings made to Companies House in the UK, TNT Express achieved a pre-tax loss of £6.4m on a turnover of £742.8m in the year ending December 2013. FedEx in the UK achieved a pre-tax profit of £34.2m on a turnover on a turnover of £230.2m in the year-ending May 2014.
