blueflyer
Topic Author
Posts: 3625
Joined: Tue Jan 31, 2006 4:17 am

TNT / UPS Update

Fri Dec 07, 2012 7:22 am

Summary: The EU had initially identified 29 countries where it believes UPS' purchase of TNT would reduce competition below acceptable levels (read only UPS and DHL left, FedEx and regional players too small to matter or absent altogether).

14 countries are no longer in contention, either because the EU and UPS have agreed remedies, or because the EU has reconsidered its position after further consultations with UPS.

Things are a bit more dicey for the remaining 15 countries. UPS is willing to sell all or some TNT assets in these countries, but wants to conduct the sale after the merger completes. The EU wants to know the buyer(s) before approving the merger to make sure they have the financial stability and network to provide meaningful competition, and not shrivel or fold within a few months. UPS is vehemently opposed because they read that to mean "sell to FedEx at any price."

UPS is offering to guarantee buyers access to its network at competitive prices for three years, but the EU prefers buyers with their own network because they claim such guarantees are hard to enforce and monitor.

http://www.ft.com/intl/cms/s/0/a0569...71-00144feabdc0.html#axzz2ELYsl8oy

(couldn't find an active UPS/TNT thread to add this to)
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HPRamper
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Joined: Sat May 14, 2005 4:22 am

RE: TNT / UPS Update

Fri Dec 07, 2012 5:21 pm

Interesting.

As things are turning out now, is UPS still happy with how the buyout is working? Seems to be a lot of legal issues, moreso than there would have been in the U.S.
 
tomkell92
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Joined: Mon Nov 12, 2012 4:20 pm

RE: TNT / UPS Update

Fri Dec 07, 2012 5:36 pm

TNT have just started new routes from MAN to STN and Liege. Does that mean that these services will eventually become UPS services, or will they keep the TNT branding?
Tom Kellock
 
blueflyer
Topic Author
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RE: TNT / UPS Update

Sat Dec 08, 2012 2:36 am

I'm sure UPS had no illusion that the EU competition commission would intervene and demand concessions, including the sale of some assets. I am no expert, but I do think it is the first time the EU wants to know who these assets will be sold to before rendering its final verdict. I can see how UPS would feel they're being forced to sell to FedEx, however, and I am sure they're keen to avoid that.

I'm equally sure that the agreement between UPS and TNT does give UPS the right to back away and cancel the sale if it feels the EU is asking for more concessions than it is willing to accept. It wouldn't be the first time that a merger fails because one side refuses to meet (all of) the EU's conditions. With that in mind, I guess we can conclude that UPS still thinks it is a worthwhile effort for the time being.

Quoting tomkell92 (Reply 2):
Does that mean that these services will eventually become UPS services, or will they keep the TNT branding?

TNT Airways, the airline division of TNT, will be sold immediately by UPS to a Spanish holding company once the merger completes to comply with EU ownership regulations. Whether specific flights will be maintained or not will be decided between UPS and the new owner of TNT Airways.
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