In a move that will surely realign the global parcel delivery market, FedEx Corp. plans to buy TNT Express N.V. in a $4.8 billion cash deal. Both firms noted in a statement that they expect to wrap up the acquisition within the first six months of 2016 and don’t foresee any major anti-trust complications.
Both FedEx and TNT also agreed to several caveats as part of this deal:
- Existing employment terms of TNT Express will be respected;.
- The European regional headquarters of the combined companies will be in Amsterdam/Hoofddorp in the Netherlands;
- TNT Express’ hub in Liege, Belgium, will be maintained as a significant operation for the group going forward;
- TNT Express’ airline operations will be sold off, in compliance with applicable airline ownership regulations.
“We believe that this strategic acquisition will add significant value for FedEx shareowners, team members and customers around the globe,” noted Frederick Smith, FedEx’s chairman and CEO, in a statement.
“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,” he added.
While Tex Gunning, CEO of TNT Express, noted that his company was “fully geared to execute our stand-alone strategy” and “did not solicit an acquisition” proposal, he believes the FedEx deal is a good one for all involved.
“We truly believe that FedEx’s proposal – both from a financial and a non-financial view – is good news for all stakeholders,” Gunning said in a statement. “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.”
This deal also follows an aborted attempt by United Parcel Service to acquire TNT Express nearly two years ago; a deal nixed by the European Commission over anti-competitive issues.
Both FedEx and TNT Express highlighted several strategic advantages to their dea, should it be approvedl:
- Their customers should enjoy broader global access via a “considerably enhanced” integrated global network;
- Specific advantages include the alignment of TNT Express’ European road platform and Liege hub with FedEx’s operations around the world, especially 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;
- FedEx plans to keep strengthening TNT Express with investment capacity, sector expertise and global scope.