One less hurdle: EU approves FedEx takeover of TNT

Less than two months after U.S. authorities approved FedEx’s takeover of TNT, the European Commission, as expected, has unconditionally approved the US$4.8 billion deal, which was first announced in April 2015.  The commission found that the merged company would not be a threat to competitors Deutsche Post DHL, the number-one parcel service in Europe, followed by UPS in the number-two position.

The commission stated of the FedEx-TNT deal that the merged companies would have a “moderate” market position in Europe and that the new player would benefit customers. TNT has an extensive road network in Europe, which is expected to blend nicely with FedEx’s strong air network. The added road connections will put FedEx in a better position to compete with UPS and DHL in Europe.

UPS had attempted to purchase the struggling TNT in 2013, but the transaction was nixed by the EU which was concerned about competition.

The long journey for FedEx/TNT is not yet over. The deal still has to be approved, most notably, by China and Brazil. The Wall Street Journal said China, with its newly established antitrust authority, has held up some recent global mergers after they were approved by U.S. and European antitrust authorities. FedEx CEO Fred Smith, however, said he remains confident that the transaction will close by mid-year, as planned.