Executive Briefings

FedEx, TNT Hope Their Merger Plan Won't See Return of Antitrust Problems That Sank UPS Deal

As FedEx and TNT Express work out the details of their planned €4.4 billion merger, echoes of a similar deal between UPS and TNT that was doomed in 2013 were instantly brought to mind. But this time around, both FedEx and TNT believe the antitrust concerns of two years ago will not play a major role in the European Union's judgment of the acquisition.

The UPS deal was shot down in 2013 because regulators in the European Commission thought it would stifle competition in the express cargo market. FedEx, however, has a much less extensive operation within Europe than UPS does, so the competitive situation with a FedEx/TNT merger is much less likely to raise concerns with regulators.

According to the latest figures from ING, as reported by Reuters, analysts estimate that the largest player in the European express market is Deutsche Post’s DHL, with a market share of 19 percent. UPS is a close second, at 16 percent, followed by TNT with 12 percent. In comparison, FedEx is far back in the pack at just 5 percent.

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The UPS deal was shot down in 2013 because regulators in the European Commission thought it would stifle competition in the express cargo market. FedEx, however, has a much less extensive operation within Europe than UPS does, so the competitive situation with a FedEx/TNT merger is much less likely to raise concerns with regulators.

According to the latest figures from ING, as reported by Reuters, analysts estimate that the largest player in the European express market is Deutsche Post’s DHL, with a market share of 19 percent. UPS is a close second, at 16 percent, followed by TNT with 12 percent. In comparison, FedEx is far back in the pack at just 5 percent.

Read Full Article