The deal, which has already been agreed with TNT’s board, would make FedEx the third-largest delivery company in Europe after UPS and Deutsche Post AG DPSTF 0.66% , the owner of DHL. It could also herald a long-awaited consolidation of the industry in Europe, which has been struggling with razor-thin profit margins as the Eurozone has labored to regain economic momentum.
UPS had tried to buy TNT in 2013 (for a price that was nearly 20% higher), but its deal had been shot down by European antitrust regulators. However, FedEx has a much smaller footprint in Europe, which means that the antitrust concerns should be more manageable. Read more
Joint press release
FedEx and TNT Express agree on recommended all-cash public offer for all TNT Express shares
This is a joint press release by FedEx Corporation and TNT Express N.V., pursuant to Section 5 Paragraph 1 of the Decree on Public Takeover Bids (Besluit openbare biedingen Wft,the Decree) in connection with the intended public offer by FedEx Corporation for all the issued and outstanding ordinary shares in the capital of TNT Express N.V. This announcement does not constitute an offer, or any solicitation of any offer, to buy or subscribe for any securities in TNT Express N.V. Any offer will be made only by means of an offer memorandum. This announcement is not for release, publication or distribution, in whole or in part, in or into, directly or indirectly,Canada or Japan.
- FedEx Corporation (FedEx) and TNT Express N.V. (TNT Express) reached conditional agreement on recommended all-cash public offer of €8.00 per ordinary TNT Express share.
- 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.
- The transaction represents an implied equity value forTNT Express of €4.4 billion($4.8 billion).
- Transaction unanimously recommended and supported by TNT Express’ Executive Board and Supervisory Board.
- High level of deal certainty.
- PostNL N.V. has irrevocably confirmed to support the Offer and tender its 14.7% TNT Express shareholding.
- Combination will transform FedEx’s 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.
- FedEx and TNT Express employees share a commitment to serving customers and delivering value for shareholders and supporting the communities they live and work in.
- The parties have agreed to certain non-financial covenants including:
o Existing employment terms of TNT Express will be respected.
o The European regional headquarters of the combined companies will be in
o TNT Express hub in Liege will be maintained as a significant operation
for the group going forward.
o TNT Express’ airline operations will be divested, in compliance with applicable
airline ownership regulations.
- FedEx and TNT Express anticipate that the Offer will close in the first half of calendar year 2016.
- FedEx and TNT Express are confident that anti-trust concerns, if any, can be addressed adequately in a timely fashion.