European Commission approves Fedex's takeover of TNT
The European Commission has given official approval to FedEx’s $4.8bn acquisition of TNT Express.
The two companies said that following an investigation, the European Commission concluded that the deal would not raise any competition concerns.
The Commission said FedEx and TNT are not particularly close competitors and the merged entity will continue to face sufficient competition from its rivals in all markets concerned.
FedEx Express regional president Europe David Binks said: “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.”
Commissioner Margrethe Vestager, in charge of competition policy, commented: "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."
While the acquisition has overcome a major hurdle in gaining approval from Brussels, there are still jurisdictions where it needs permission.
“FedEx and TNT Express continue to work constructively with the regulatory authorities to obtain clearance of the transaction in the remaining jurisdictions, including Brazil and China,” the companies said.
“FedEx and TNT Express are making timely progress and continue to anticipate that the offer will close in the first half of calendar year 2016.”
In October, the two companies indicated that the European Commission had expressed no objections to the merger, but this was not the official confirmation the companies were waiting for.
It had not been clear whether Brussels would give the deal the go-ahead as it had scuppered a similar deal between UPS and TNT in 2013 over competition concerns.
The Commission also announced last year it would take a closer look at the deal over concerns that the acquisition could lead to higher prices for consumers and businesses in some countries.
However, it is no clear that Brussels decided these concerns were unfounded.
As part of the approval it is expected that TNT will have to sell its fleet of aircraft. However, whether this was included in the approval could not be confirmed by Air Cargo News at time of publication.
The deal will also see Binks become chief executive of TNT, replacing Tex Gunning.