FedEx bids $4.8bn for TNT

Parcel delivery firm FedEx Corp is expanding its presence in Europe through the acquisition of Dutch-owned counterpart TNT Express. The merging of the two companies will enable FedEx to bolster its global standing within the logistics and transportation market. Currently, the industry’s biggest player is DHL, with FedEx coming nowhere close to matching its revenue and TNT trailing even further behind the global rankings.

The acquisition will enable FedEx to utilise TNT’s strong European road platform, particularly in France and the UK in which it currently has a low profile. While TNT stands to benefit significantly from FedEx’s global network, air fleet and freight forwarding services.

The acquisition will enable FedEx to utilise TNT’s strong European road platform

In 2013, UPS attempted the same move with TNT, but was blocked by European regulators for anti-competition reasons. FedEx on the other hand is not large enough a global player to warrant such concerns, with analysts saying that the amalgamation of the two companies will complement one another’s current service offerings.

Since the failed merger with UPS, TNT has undertaken a new business strategy, which includes internal restructuring, cost cuts and investing into its road network in order to retain its European customer base within a difficult period for the industry. Although TNT did not solicit the deal, the merger is seen as welcome news for the group as it entails short-term benefits for both shareholders and customers.

“We believe that this strategic acquisition will add significant value for FedEx shareowners, team members and customers around the globe. 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”, Frederick W. Smith, FedEx Chairman and CEO said in a joint press release.