EU regulators broaden probe into UPS, TNT deal

EU antitrust regulators stepped up their investigation into United Parcel Service’s 5.2 billion euro (4.1 billion pounds) bid for Dutch peer TNT Express on Friday, saying they were concerned about the combined company’s large market share.
 
UPS, the world’s No. 1 package delivery company, said last week that it expected the European Commission to open a lengthy investigation into the deal. The EU watchdog launched a preliminary review in June.
 
The Commission said it was worried about potential competition issues in the small package delivery sector, particularly international express services in some European Union countries where the combined company would have very high market shares.
 
"The small package delivery sector is of strategic importance for various other industries in Europe," Joaquín Almunia, Commission vice president in charge of competition policy, said in a statement.
 
"The proposed acquisition could in particular reduce competition for the provision of the fastest express delivery services, to the detriment of direct customers and ultimately of European consumers."
 
The EU executive said it would decide by November 28 whether to clear the deal.
 
"We remain confident that we will receive clearance within the fourth quarter," a spokesman for TNT told Reuters, adding that UPS and TNT were still talking to the Commission.
 
DIVESTMENTS?
 
The acquisition of TNT will reinforce UPS’s global market share and give it access to the Dutch company’s stronger networks in fast-growing Asian and Latin American markets.
 
Analysts had already warned that the deal would give UPS a dominant position in some markets, such as Britain, and that as a result it would have to sell assets to soothe regulatory concerns about its largest ever deal.
 
TNT declined to comment on whether such sales are being discussed.
 
German rival Deutsche Post has already highlighted that the deal would create a powerful group in a limited market.
 
TNT is the domestic market leader in Europe with an 18 percent share, while Deutsche Post DHL is second at 15 percent, and UPS has 10 percent.
 
Analysts have estimated that in the UK, TNT and UPS have a combined market share of about 35 percent, while in Germany and France their share is about 30 percent, and in the Netherlands it is below 30 percent. ($1 = 0.8156 euros)

Quelle: eyefortransport

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