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FedEx to buy TNT Express for €4.4bn

FedEx to buy TNT Express for €4.4bn

US parcels delivery firm FedEx is to buy its Dutch rival TNT Express for €4.4bn ($4.8bn; £3.2bn) as it looks to expand its European operations.
 

In a joint statement, the companies said both management boards had reached a "conditional agreement".FedEx has offered shareholders €8 per share, a 33% premium on TNT's closing share price on 2 April.

The takeover comes two years after FedEx's US rival UPS had a €5.2bn move to buy TNT blocked by European competition regulators. However, FedEx emphasised that there is a "high level of deal certainty" in its takeover and it anticipates "no major anti-trust issues".

The European Commission had called a halt to TNT's tie-up with UPS in 2013 on the grounds that the deal would limit customer choice and reduce the number of companies who could deliver small-packages across the continent. UPS is still engaged in a legal battle with the Brussels-based regulator over its decision.

TNT said the buyout was "good news for all stakeholders".

"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," said Tex Gunning, who took over as chief executive of the Dutch company after the failed UPS deal.

Analysts said that FedEx's bid was around 20 times TNT's 2016 earnings, a "high multiple for a transport company". Berenberg Bank meanwhile said that the merger could deliver around the same level of synergies of around $400m to €550m as in the UPS and TNT deal, which explains why FedEx is willing to pay a 33pc premium.

 

Author: Vishesh Tyagi, handelot.com
Source:
http://www.cnbc.com/id/102564527

http://money.cnn.com/2015/04/07/investing/fedex-tnt-express/

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