After a failed attempt to sell itself to UPS, TNT Express has entered into an agreement with FedEx. According to a joint press release, the two companies said they had reached conditional agreement on a recommended all-cash public offer of 8.00 euros per ordinary TNT Express share, putting the deal at $4.8 billion.
“The Offer Price represents a premium of 33% over the closing price of 2 April 2015 and a premium of 42% over the average volume weighted price per TNT Express share of €5.63 over the last 3 calendar months,” according to the announcement.
The acquisition will help FedEx transform its European capabilities and accelerate global growth. “Customers will enjoy access to an enhanced, integrated global network, combining TNT Express strong European capabilities and FedEx’s strength in other regions globally, including North America and Asia,” the companies said.
TNT Express’ airline operations will be divested, in compliance with applicable airline ownership regulations, and they anticipate the offer will close in the first half of calendar year 2016.
UPS abandoned its 2012 $7 billion bid for the European company “after encountering stiff objections to the deal from European antitrust regulators,” according to the Wall Street Journal.
According to this week’s announcement, “FedEx and TNT Express are confident that anti-trust concerns, if any, can be addressed adequately in a timely fashion.”
The Wall Street Journal said FedEx is a relatively small player in Europe, unlike UPS.