BRUSSELS: January 08, 2016. The European Commission has approved the proposed acquisition of TNT Express by FedEx Corporation following an investigation begun in July 2015.
The announcement coincides with the beginning of the Dutch presidency of the Council of the EU and a visit to Amsterdam by Commission president Jean-Claude Juncker. (Left of picture with mayor of Amsterdam Eberhard van der Laan at the Hermitage Museum).
In giving the go-ahead to FedEx, the Commission said its purchase of TNT Express would not give rise to competition concerns because the two companies are “not particularly close competitors” and the new entity will continue to face sufficient competition from its rivals in all markets concerned.
Competition commissioner Margrethe Vestager noted: "Many businesses and consumers rely heavily on affordable and reliable small package delivery services, in particular with the growth of e-commerce. Therefore, the Commission has thoroughly assessed the markets affected by this takeover. The conclusion is that European consumers will not be adversely affected by the transaction. We have therefore unconditionally approved the merger."
In 2013 the Commission blocked a planned takeover of TNT by UPS arguing it would lead to price increases and harm customers, because FedEx did not exert a significant competitive constraint for intra-EEA express delivery services. The Commission said it applied the same assessment methodology for the proposed TNT acquisition as it had for the earlier UPS bid to ensure “full consistency with its previous practice”.
David Binks president of FedEx Express Europe, commented: “We are extremely pleased to receive the European Commission’s unconditional approval. “We believe the combination of TNT Express and FedEx will provide significant value to the employees, customers and shareholders of both companies.”
Both companies await government approval from China and Brazil and expect to complete the takeover in the first half of this year.